Buying a house is a major step, and planning to purchase a home can be a lot of fun. You get to figure out where you’d hang your favorite artwork, plant a vegetable garden, put the PlayStation — and maybe contemplate taking on some DIY projects yourself.
But there’s another, more nuts-and-bolts aspect to your pursuit of the American Dream: how to budget for a house. Almost 66% of people in the U.S. were homeowners in the fourth quarter of 2025, according to the latest Census data. That’s a good indicator that buying your own home is within reach.
Doing so will likely require you to be smart about your finances in terms of saving and taking on the responsibility of owning a property. To help you be successful in this pursuit, read on for the intel you need, such as:
• How do I know how much house I can afford?
• What are the costs/fees to consider?
• What will my ongoing costs be?
• How can I budget for a house?
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Table of Contents
- Key Points
- • Budgeting for a house involves preparing for upfront costs such as the down payment, closing costs, and moving expenses.
- • Many loan programs allow down payments below 20%, including options as low as 3% for qualifying buyers.
- • Closing costs typically range from 2% to 5% of the home’s purchase price and may be reduced through credits or assistance programs.
- • Homeownership includes ongoing expenses such as mortgage payments, taxes, insurance, Homeowners Association (HOA) dues, utilities, and maintenance.
- • A common guideline is to keep monthly housing costs within 28% of your pretax income to maintain financial stability.
Upfront Expenses
First, consider how much you would have to fork over if you find that perfect center-hall Colonial or loft-style condo. Once an offer on a new home is accepted, there are certain things the buyer needs to pay for right off the bat and, in most cases, out of their own pocket. These are called upfront expenses. Here are a few.
Down Payment
You may have heard of the traditional 20% down payment guideline, which helps you avoid paying private mortgage insurance (PMI) on applicable loan programs. A higher down payment may also result in better mortgage loan terms, such as a lower interest rate, which may translate into lower monthly mortgage payments.
Yes, it’s a lot of money to put aside, but if you can swing it, in the long run, applying a 20% down payment will likely save you from paying thousands of dollars in additional mortgage interest over the life of the loan. Can’t pull together that big a chunk of change? Look into options of a mortgage lender with a lower or no down payment:
• The minimum down payment for a first-time homebuyer on a conventional loan can be as little as 3%. You may also need a strong credit profile to qualify, and lenders may set their own minimum credit score requirements.
• A Federal Housing Administration (FHA) government loan that is open to everyone typically requires a down payment of at least 3.5%.
• Department of Veterans Affairs (VA loans) or U.S. Department of Agriculture loans may allow eligible borrowers to finance up to 100% of their home’s cost. In other words, no down payment is required.
It’s worth noting that, regardless of the size of your down payment, buying may still reduce your overall monthly expenses, depending on market conditions, interest rates, and individual circumstances.
2% to 5% Closing Costs
You can expect to pay an estimated 2% to 5% of your home price for closing costs and should save accordingly. For example, if you buy a home that costs $300,000, you may be required to pay between $6,000 and $15,000 in closing costs.
Some costs are fixed and not tied to the price. In these cases, the percentage can be higher for the lower range and lower for the higher purchase price range.
What exactly do closing costs comprise? This can include bank charges, such as origination fees and any points you may have purchased to buy down your interest rate, and costs such as the appraisal fee and a title search.
Keep in mind that there are alternatives to paying the closing costs out of pocket, such as requesting a seller credit, requesting a lender credit, or tapping into an applicable down payment assistance program. These options can help you minimize this expense.
Moving Costs
Don’t forget when budgeting for buying a house that you will need funds to move in. Unless you’re lucky enough to have a generous pal with a van, you’re probably going to have to hire a moving company. The average cost of a long‑distance move in 2026 is typically around $3,020, though prices vary based on distance, weight, and service level.
These costs can vary widely, of course. If you are moving with just a bedroom’s worth of furniture versus a whole house, your price tag will be lower. It’s wise to comparison-shop for moving companies and factor this expense into your own budgeting for a home move.
If you’re relocating for work, check with your company to see if it offers a relocation package to help cover some or all of the moving costs.
New Furniture and Appliances
Your new house may not have the same dimensions and style as your old house. This could mean that you need to buy new furniture and appliances. When budgeting for buying a house, you might want to talk to friends or relatives who have moved recently and ask about unexpected expenses. For example, it’s not uncommon when you move to have to purchase items such as new locks, shower rods, and window treatments. These expenses can quickly add up.
You might want to start a savings account for these types of purchases — some of them may be costlier than you imagined.
Recommended: First-Time Homebuyer Guide
First-time homebuyers can
prequalify for a SoFi mortgage loan,
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Ongoing Expenses
Now that you’ve figured out the details related to the actual purchase, consider the expenses that will accrue once you’re a homeowner. Recurring charges are a vital part of the calculations of how much home you can afford.
Monthly Charges
First, consider how much you’ll be spending every month on your monthly mortgage payment and related costs. Principal, interest, property taxes, homeowners insurance, and other assessments (PITIA) are the components of a mortgage payment. Here’s how it breaks down:
• P: The principal is the “meat” of the monthly payment amount — paying down the principal will reduce the loan balance.
• I: Interest is what you are charged for borrowing the money.
• T: Taxes refer to your property taxes.
• I: This “I” refers to insurance. This includes both your homeowners and mortgage insurance, if applicable.
• A: Other assessments refer to things that may apply to the home you purchase, including HOA dues and flood or earthquake insurance.
HOA Dues
HOA dues typically apply to a condo, co-op, or property owned in a planned community.
The charge is monthly (although it could be quarterly or annually), and the funds usually go toward maintaining the community (landscaping, garbage collection, repairs, and upgrades).
Before purchasing a property with HOA dues, consider asking the association for a complete HOA questionnaire. With this, you can assess how healthy the association is, whether there is any outstanding litigation due to structural or other issues, etc. These factors could impact costs down the road.
Maintenance and Lawn Care
Your budgeting probably won’t stop once you’ve moved and settled into your new home. Expenses will likely continue to knock on your door — landscaping, roof repair, and water heater replacement are just a few items that might require ongoing financial consideration.
You may want to budget for 1% to 4% of the cost of your home each year to pay for maintenance expenses. However, deferred maintenance costs may require more funding, depending on the age, quality of construction, and where you live, for example.
Pest Control, Security, and Utilities
The cost of electricity, gas, water, and internet services differs from market to market. This is also true for pest control and services that help ensure your home is secure and safe. You could find yourself paying more (or even less) for these services depending on where your new home is located.
Quiz: How Much House Can You Afford?
Planning Ahead
So, now that you understand the costs associated with homeownership, you can start working on how to budget for a house.
Ideally, you’ll want to cover your home-buying costs and then be able to afford your monthly carrying costs without racking up debt. The standard advice is that your monthly housing expenses should account for up to 28% of your monthly pretax income. Given how expensive some housing markets can be, it’s not uncommon to find people spending more than that right now.
Here’s some advice for figuring out what you can afford.
Target Mortgage Costs
Do your research on the different types of mortgage loan programs. Determine your price range based on the current interest rates. Find the programs that may best suit you so you’ll feel confident you can bid and afford a home once you have your down payment saved. Don’t forget to factor in those other PITIA expenses mentioned above as you think about your own monthly income and cash outflow when you’re a homeowner.
Build a Budget
Once you have these costs calculated, you can then start budgeting for buying a house. You’ll want to save for your down payment while paying current bills and handling other financial obligations, of course.
• Create a line item budget. You’ll want to note how much money you have coming in and how much is spent on your needs (housing, food, medical expenses, debt repayment). You’ll see what’s left for your wants (think travel, dining out, clothes, and entertainment) and start saving money for your future home.
◦ Don’t skimp, though, on establishing an emergency fund. In a pinch, these funds can keep you from using your credit card and running up even more debt.
• Assess where you can save more. To ramp up your savings for your house, look for ways to economize. Could you drop a subscription or two to streaming channels, or perhaps eat out less often?
◦ Also see what you can do to avoid high-interest credit card debt, which can take a bite out of anyone’s budget. You might want to take advantage of a zero-interest balance transfer credit card offer or investigate whether a lower-interest personal loan could help you pay off your debt and save money.
• Use automatic transfers. Help yourself hit your savings goals by automating payday transfers from checking to savings. That way, you won’t see the cash in your account and be tempted to spend more.
• Bring in more moolah. If the numbers aren’t adding up to bring your home-buying plans within reach fast enough, consider using windfalls (a tax refund, a bonus at work, or a birthday gift of cash from a relative) to boost your savings. Also think about ways to bring in more income, whether by asking for a raise or pursuing a side hustle.
The Takeaway
Budgeting for buying a house requires thinking about short-term costs, such as a down payment, closing costs, and moving expenses, as well as long-term costs, including homeowners insurance and maintenance expenses. It’s wise to look at both before you pursue a mortgage preapproval or make an offer on a home.
Looking for an affordable option for a home mortgage loan? SoFi can help: We offer low down payments (as little as 3% - 5%*) with our competitive and flexible home mortgage loans. Plus, applying is extra convenient: It's online, with access to one-on-one help.
FAQ
How much money should you save before buying a house?
Ideally, you should save enough money for a 20% down payment, although many homebuyers put down less, and some government programs allow you to buy with no down payment at all. You’ll also want to have money for closing costs (2% to 5% of the home’s price) and an emergency fund in case of an unexpected setback.
How much do I need to earn to afford a house?
This depends on the housing market you’re looking at and the area’s overall cost of living. The national average salary is roughly $62,140 per year, which may be able to afford you a $180,000 home. Use a home affordability calculator to explore the numbers for your specific situation.
What ongoing costs should I expect after buying a house?
Homeownership comes with recurring expenses beyond your mortgage payment. You’ll need to budget for property taxes, homeowners insurance, HOA dues (if applicable), utilities, and routine maintenance. Many homeowners set aside 1% to 4% of their home’s value each year for upkeep, plus additional funds for unexpected repairs.
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*SoFi requires Private Mortgage Insurance (PMI) for conforming home loans with a loan-to-value (LTV) ratio greater than 80%. As little as 3% down payments are for qualifying first-time homebuyers only. 5% minimum applies to other borrowers. Other loan types may require different fees or insurance (e.g., VA funding fee, FHA Mortgage Insurance Premiums, etc.). Loan requirements may vary depending on your down payment amount, and minimum down payment varies by loan type.
¹FHA loans are subject to unique terms and conditions established by FHA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. FHA loans require an Upfront Mortgage Insurance Premium (UFMIP), which may be financed or paid at closing, in addition to monthly Mortgage Insurance Premiums (MIP). Maximum loan amounts vary by county. The minimum FHA mortgage down payment is 3.5% for those who qualify financially for a primary purchase. SoFi is not affiliated with any government agency. †Veterans, Service members, and members of the National Guard or Reserve may be eligible for a loan guaranteed by the U.S. Department of Veterans Affairs. VA loans are subject to unique terms and conditions established by VA and SoFi. Ask your SoFi loan officer for details about eligibility, documentation, and other requirements. VA loans typically require a one-time funding fee except as may be exempted by VA guidelines. The fee may be financed or paid at closing. The amount of the fee depends on the type of loan, the total amount of the loan, and, depending on loan type, prior use of VA eligibility and down payment amount. The VA funding fee is typically non-refundable. SoFi is not affiliated with any government agency. Financial Tips & Strategies: The tips provided on this website are of a general nature and do not take into account your specific objectives, financial situation, and needs. You should always consider their appropriateness given your own circumstances.
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