Short Answer
You typically need 3% to 20% of the purchase price for a down payment, plus 2% to 5% for closing costs. For a $400,000 home in South Jersey, that means roughly $16,000 to $80,000 in total cash to close, depending on your loan type and down payment. Many first-time buyer programs require as little as 3% down, so do not assume you need 20%.
The total cash you need to buy a home goes beyond just the down payment. You also need to budget for closing costs, which include lender fees, title insurance, appraisal costs, attorney fees, and prepaid property taxes and insurance. In New Jersey, closing costs typically range from 2% to 5% of the purchase price. On a $400,000 home, that could be $8,000 to $20,000 in closing costs alone. Your down payment depends on your loan type. Conventional loans often require 5% to 20% down. FHA loans allow as little as 3.5% down. VA and USDA loans may require zero down payment for qualified buyers. Keep in mind that putting less than 20% down usually means paying private mortgage insurance (PMI), which adds to your monthly payment. An earnest money deposit of 1% to 3% of the purchase price is also due when your offer is accepted, but this money goes toward your down payment at closing, so it is not an extra cost.
Bob's Advice
Redfin Senior Agent · AI Certified Agent
Do not let the numbers scare you away from starting the process. I have helped many first-time buyers who assumed they needed a huge down payment only to discover affordable options they did not know existed. The best first step is a free consultation where we look at your specific financial situation. I can connect you with trusted lenders who will give you a clear picture of what you actually need, not what you think you need. Schedule a call and let us map out your path to homeownership.
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