Reviewed by Kladi Bejkolli Mortgage Loan Officer, NMLS #1626841 Updated September 27, 2026
Plan on three buckets of cash: a down payment, closing costs, and reserves for life in the home. Down payments commonly run from 3% to 20% of the price depending on the loan program, and closing costs often land around 2% to 5% of the loan amount. The exact number depends on your price range, the program, and your full financial picture, which is exactly what Kladi runs with you.
Your down payment is the portion of the price you pay in cash up front. Common starting points: 3% on many conventional loans, 3.5% on FHA loans, and 0% on VA and USDA loans for borrowers who qualify. Put 20% down and you can usually avoid mortgage insurance, but 20% is not a requirement for most programs. A smaller down payment can still be a smart move if your savings and monthly budget support it.
Closing costs cover the work of making the loan happen: appraisal, title search and insurance, lender fees, recording fees, and prepaid items like property taxes and homeowners insurance. They often run roughly 2% to 5% of your loan amount. Your Loan Estimate lists them line by line, and every line is fair game for questions.
Lenders and smart buyers both want a cash cushion after closing: a few months of mortgage payments in the bank, plus a buffer for whatever the home throws at you in year one. Reserves are not a fee. They are the difference between a stressful first year and a comfortable one.
Before you talk to anyone, you can ballpark your range: start with a monthly payment you can carry, subtract an estimate for taxes and insurance, and work backward to the loan amount that fits. That gives you a budget to shop with and a strong starting point for your first real conversation.
Guidelines change and programs vary by state, product, and credit profile, so treat published minimums as a starting point. Kladi will confirm the current numbers for your situation before you commit to anything. That conversation is free, and it is the whole point of the process.
General education only: not a quote, an offer of credit, or a promise of approval. Programs and guidelines vary by state, product, and borrower profile. Confirm your situation with Kladi directly.
Kladi will confirm what applies to the state your property is in and lay out your realistic options with the tradeoffs visible.
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