Let’s calculate it for a variety of different home prices. Regardless of mortgage rates, this is how much you need to save for a down payment at 3% or 7% because they’re based on the math of the sale price, not the interest rates. How much you need to make though IS dependent on rates so that math changes.

Let’s start with a $200,000 house on an FHA 3.5% down. On your calculator type in 3.5 and hit % to get a decimal of 0.035 and then X 200,000=$7,000 and your closing costs will be at least that much for a total of $7,000 (more in some states) so in this scenario I’d advise clients to have at least $15,000 plus for inspections, and buyer agency compensation if necessary. I tell clients expect your total cash to close will be at least double your down payment in any state. In other states, it’s higher.

Let’s say you want the house but the roof needs to be repaird and the seller isn’t about to fully cover the full cost of something they’re never going to benefit from. (They say that all the time in negotiations!) You might have to meet in the middle with that expense if you really want the house and in seller’s markets, they have that leverage so multiple houses you look at might have this scenario. This is why so many buyers get blindsided by closing costs because all the money needed to bring the deal together can add up through the transaction. This is where it’s important to have additional savings or go back and negotiate seller concessions too. For the seller, they can be pay things at closing from the proceeds to compensate you some costs. You can have them cover what you covered on the roof out of pocket in seller credits, etc. No down payment loans are even higher interest rate and you’re approved for less so keep that in mind. You might not qualify for the house you want anymore. I have seen many times the “double your down payment” rule doesn’t work. I recommend more to avoid stress, surprises, and to know you’re in good standing.

All this to say, for each price, my rule of thumb (to also account for negotiations, inspections, and other fees you’ll pay during escrow) I tell clients, if you have 10% of the total purchase price, you should be fine.

$200k=$20k, $300k=$30k, $400k=$40k, $500k=$50k etc. If you’re worried about the “new” NAR rulings and you might have to pay commissions if you want an agent to help you, these amounts should help cover. If the seller is insisting on lots of costs for you to share, make sure you and your agent fully discuss it or get some kind of compensation back (like closing concessions as much as your loan allows) before you shell out. Sometimes you have to walk away. Ask your lender too because there are limits but FHA and Conventional loan holders Fannie Mae/Freddie Mac announced they will not count commissions against buyers so that’s good news!! There are still loan limits how much you can receive in credits so be wary of that and ask upfront with your lender.

One thing to note too, is that lenders like to see cash reserves in your account. This is why it’s so important to save and why I tell clients to expect a minimum of 10% needed because it’s not just the down you’re going to have to pay. Closings costs are just as high or worse, and some clients won’t get approved without reserves. Otherwise, you’ll need seller concessions and/or gift funds from loved ones to help the deal close. I’ve seen it too many times people weren’t aware of this. That emergency fund is what they’re looking for in addition to your total cash to close amounts. When in doubt, save more!