How Much Money Do You Need to Buy a Home in Minnesota?

How much money do you need to buy a home in Minnesota? For most buyers, the answer is less than they expect. You do not need 20 percent down, and you do not pay everything at once. The costs arrive in stages, and some buyers qualify for help with them.

I'm Lesley, a REALTOR® with Bridge Realty, and this is the question we hear more than any other at Lesley The Realtor. Here is how we explain it to our clients.

• Earnest money. A good-faith deposit you submit with your offer. It is not an extra fee. At closing, it is credited toward your down payment or closing costs.
• Home inspection. Paid during the inspection period. It tells you the true condition of the home before you are fully committed.
• Appraisal. Ordered by your lender to confirm the home's value supports the loan.
• Down payment. Often far less than 20 percent. Some loan programs allow as little as 3 percent down, and certain buyers qualify for even less.
• Closing costs. The fees to finalize the purchase, which typically include lender fees, title services, prepaid property taxes, and homeowners insurance.

Early in the process, your lender gives you a written Loan Estimate showing your expected cash to close. We review it with you line by line.

Many buyers are surprised to learn that help exists. Minnesota Housing, along with a number of city and county programs, offers down payment and closing cost assistance to buyers who meet their guidelines. Eligibility often depends on your income, the purchase price, the location, and whether you have owned a home recently.

With every buyer we work with, we check whether any program fits. We also connect you with reputable lenders who explain your options plainly. Our first-time buyer page covers this in more detail.

There is a credit score lenders look for, and it depends on the loan program. Some programs accept lower scores than many people expect. If your credit is not where you want it yet, that is a reason to start the conversation now, not a reason to wait. A lender can review your credit with you and give you a clear plan, so you know what to work on and when you will be ready.

Your monthly payment includes principal, interest, property taxes, homeowners insurance, and sometimes mortgage insurance or association dues. Property taxes vary by city and county in Minnesota, so two homes at the same price can cost different amounts each month. We compare the real monthly cost of each home before you choose.

You can see how we guide buyers through each step on our how we help buyers page, or read about buying a home in Minnesota.

Every buyer's numbers are different. Tell us your situation, and we will help you find out what you would need and whether you qualify for help. No pressure and no obligation. Send us a message or call (651) 661-4770.