One of the most common questions I get from West Valley buyers is simple: “How much money do I actually need saved before we start looking?” The honest answer is that it depends on your loan type, but here’s a general breakdown to help you plan.
Down payment is usually the first number people fixate on, but it varies widely. Conventional loans can go as low as 3-5% down for qualified buyers, FHA loans typically start around 3.5%, and VA loans for eligible veterans can require 0% down. That means a $450,000 home in Peoria or Goodyear could need as little as $0 down up to around $15,750-$22,500, depending on the loan program. Putting down a full 20% (about $90,000 on a $450,000 home) is only necessary if you want to avoid mortgage insurance – it is not a requirement to buy.
Closing costs are the piece buyers most often forget to budget for. Plan on roughly 2-4% of the purchase price to cover lender fees, title insurance, appraisal, inspection, and prepaid items like property taxes and homeowners insurance. On that same $450,000 home, that’s typically somewhere between $9,000 and $18,000, though buyers can sometimes negotiate for the seller to cover a portion of these costs.
If saving for a down payment feels like the biggest hurdle, know that there are down payment assistance programs available that can bring your down payment to $0 – though you’ll still need funds to cover closing costs. There are also other buyer assistance programs designed for those who need a little extra help, and depending on your situation, one of these may make more sense than a conventional route. I regularly work with lenders who specialize in these programs and can help match you with the right one for your needs. For buyers who already own a home and need funds to purchase before their current home sells, bridge loans are another option worth discussing with your lender. And if you’re relocating from out of state, you’re in good company – I personally help an average of four families move to Arizona from other states every year, so I’m familiar with the extra planning that kind of move takes.
Finally, don’t forget a cash reserve after closing for moving costs, immediate repairs, or furnishing. Every buyer’s numbers look a little different once we factor in your specific loan program and goals, so the best next step is a quick call with a trusted lender to get pre-approved and see real numbers based on your situation. I’m always happy to make an introduction if you need one.
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