Photo from Burst

How to buy a house — from someone who doesn’t have a house

I don’t have a house (yet)…but this should help.

Curious about how buying a house works? Same here. It’s exciting to think about, but also a bit daunting. Fortunately, many people have houses and we can learn from them. This is what I know so far.

So, what do you need to buy a house?

Besides a good credit score and at least around two years in the workforce, you should be prepared upfront to do two things: make a down payment, and pay buyer closing costs.

A down payment is just paying for a percent of the house cost. A down payment usually is between 3.5%-20% of the house cost.

For example, if you want a $400,000 house, a 20% down payment would be $80,000.

Buyer closing costs are typically 2–5% of the house cost.

For a $400,000 house, a 5% closing cost would be $20,000.

Besides the down payment and closing costs, other costs to expect include property taxes and also property inspections.

For a $400,000 house, property taxes might be around $3,500-$11,000 per year (varies greatly depending on the location). A property inspection might cost $300-$600 and is usually a one-time cost.