How Much Money Do You Actually Need to Buy a Home?

Most buyers come into the home-buying process with one number in mind: the down payment. And then, somewhere between the accepted offer and the closing table, they discover that the down payment was only part of what they needed. This guide gives you the full picture — before you start shopping.

The Down Payment

The down payment is the portion of the purchase price you pay upfront — the rest is financed through your mortgage. How much you need depends on your loan type:

• Conventional loans typically require 3–20% down. Putting down less than 20% triggers Private Mortgage Insurance (PMI), which adds to your monthly payment.
• FHA loans allow as little as 3.5% down and are popular with first-time buyers who have lower credit scores or less savings.
• VA loans — available to eligible military members and veterans — often require zero down payment. Given Hampton Roads's large military community, this is one of the most underutilized benefits in our market.
• USDA loans apply to certain rural areas and also allow zero down. Parts of Suffolk, Isle of Wight County, and outer Chesapeake may qualify.

Closing Costs

Closing costs are the fees associated with processing, insuring, and legally transferring the property. In Virginia, buyers typically pay 2–3% of the purchase price in closing costs. On a $350,000 home, that is between $7,000 and $10,500.

Closing costs typically include:

• Lender origination fees
• Title search and title insurance
• Recording fees paid to the city or county
• Prepaid homeowner's insurance (usually 12 months upfront)
• Prepaid property taxes (prorated to closing date)
• Prepaid interest (from closing date to end of the month)
• Escrow setup fees

Some of these costs are negotiable — a seller may agree to cover a portion of your closing costs as part of the deal. This is something we explore in every negotiation.

Inspection Fees

A standard home inspection in Hampton Roads runs $350–550 depending on the size and age of the home. This is not optional. The inspection protects you by identifying defects before you are legally bound to the purchase.

Depending on the property, you may also want additional inspections:

• Radon testing: $150–250
• Pest/termite inspection: $75–150 (required for VA loans)
• Sewer scope: $300–500 (strongly recommended for older homes)
• Mold inspection: $300–600

The Appraisal

Your lender requires an independent appraisal to confirm the home's market value before financing the purchase. Appraisals in Hampton Roads typically cost $500–900 and are paid before or at closing.

If the appraisal comes in below the purchase price, you have options — but you need an advisor who knows how to handle them. This is not a rare situation in competitive markets.

Cash Reserves

Most lenders want to see that you have 1–3 months of mortgage payments remaining in savings after closing. This demonstrates you can sustain homeownership beyond day one. If your down payment depletes your savings entirely, that can be a red flag for underwriters.

Moving and Immediate Setup Costs

Budget $800–2,500 for a local move in Hampton Roads depending on the size of your household and distance. Beyond the move, plan for:

• Changing locks ($150–300)
• Utility setup and deposits
• Any immediate repairs or updates
• Basic appliances if not included in the sale

Putting It All Together

On a $350,000 home purchase using a conventional loan with 10% down:

• Down payment: $35,000
• Closing costs: $7,000–10,500
• Inspections: $700–1,200
• Appraisal: $600–900
• Moving: $1,000–2,000
• Cash reserves (required to keep): $4,000–6,000

Total needed: approximately $48,000–55,000 — not $35,000.

This is why we walk every buyer through the full financial picture before we look at a single listing. Understanding the real number from the start is what prevents heartbreak mid-process.