The Real Buyer's Guide · Section Two
Section One said your down payment isn’t the number you’re saving for. This is the number you’re actually saving for, and the rules about where it’s allowed to come from.
Every dollar you need falls into one of four piles. Most buyers save hard for the first and are ambushed by the other three.
| Bucket | What it covers | Do you get it back? |
|---|---|---|
| Down payment | Your stake in the house. Can be 0% on a VA or USDA loan, 3–5% on many conventional programs, 3.5% on FHA. | It becomes your equity. Not spent — moved. |
| Closing costs | Lender fees, title, appraisal, recording, and the rest of the paperwork. Budget about 2.5% of the purchase price. | No. This is money that leaves. |
| Prepaids and escrow | The first chunk of property taxes and homeowner’s insurance, collected up front so your escrow account starts funded. | Not really — you’d owe these anyway, just later. |
| Reserves | What’s left in your account after closing. | It’s yours. That’s the entire point of it. |
Saving for the down payment and nothing else is how people end up borrowing from a credit card to pay for the inspection on the house they’re buying.
Same median Tooele home used in Section One, so the two sections agree with each other.
| On a $462,495 purchase | Conventional, 5% down | VA, 0% down |
|---|---|---|
| Down payment | ~$23,125 | $0 |
| Closing costs | ~$11,562 | ~$11,562 |
| Prepaids and escrow setup | Prorated | Prorated |
| Suggested reserves | 2–3 months of payments | 2–3 months of payments |
| Realistic savings target | ~$40,000–$43,000 | ~$17,000–$20,000 |
| Financed, not saved for | — | VA funding fee, $9,944 |
The $462,495 is the median sale price for a single-family home in Tooele County, January through August 2026, from the RapidStats Local Market report on the Wasatch Front Regional MLS. Down payment assumes 5% of that. Closing costs are figured at 2.5% of the purchase price — one planning number rather than a range, set high enough in the normal band to leave you room — and the savings targets add two to three months of principal and interest on top. Ask your lender for the written estimate early rather than at signing — it is the only figure that is actually yours.
Read the last two rows carefully, because this is where the VA advantage gets misread in both directions.
Prorated is the honest answer for prepaids, not a dodge. At closing you pay your share of the year’s property taxes and insurance — your portion for the part of the year you will actually own the house. Buy in October and it is small; buy in February and it is most of a year. Nobody can hand you that number until a closing date exists.
The funding fee sits on its own line for a reason. It is normally financed into the loan, not paid in cash, so it does not belong in a savings target — it is not money you need in the bank. Roll it in and it costs you a little more interest over thirty years; it does not cost you anything the day you close. And it is waived outright for a service-connected disability rating.
A VA buyer needs roughly $24,000 less in the bank than a conventional buyer for the same house. That is the whole difference, and it is a difference in savings, not in price.
Two things that change these numbers in your favour, and both are worth asking about before you assume you’re short:
These aren’t on any lender worksheet, and they all land within about a month of getting the keys.
This is the section I’d read twice. Lenders don’t only care how much you have — they care where it came from and how long it’s been there. Buyers find this out late, and late is expensive.
Money that has been sitting in your account for a couple of monthly statements is unremarkable. Money that appeared last week gets a question, and you’ll need to document the answer. Nothing sinister — underwriting is checking you didn’t take an undisclosed loan for the down payment, because that changes the debt picture they approved you on.
Physical cash deposited into your account is difficult or impossible to use, because there’s no paper trail showing where it came from. If you’re paid partly in cash, or you’ve been saving in a safe, get it deposited and seasoned well before you apply. This one catches tradespeople and service-industry workers constantly.
A parent or relative can gift you down payment funds under most loan programs. It requires a signed gift letter stating the money isn’t a loan, and usually documentation of the transfer. Perfectly routine — as long as nobody hands you an envelope and calls it a surprise two weeks before closing.
Do not move money around while you’re under contract.
Between pre-approval and closing, keep your accounts boring. No new credit cards, no financing a truck, no large unexplained transfers between accounts, no changing jobs if you can help it. Underwriting re-checks before funding, and I have watched deals wobble over a car bought three weeks before closing.
If something has to change, tell your lender first. Almost everything is workable when they know in advance and almost nothing is when they find out on their own.
The buyer who arrives with a documented, seasoned, boring pile of money closes on time. Every time.
If you want help working out what your real target is, call or email me. I’ll tell you what I actually think, including if the answer is that you’re closer than you assumed.
Cecil Hawthorne, REALTOR® · Utah License #319617-SA00 · Sun Key Realty LLC · 801-870-6509 · cecil.hawthorne.realtor@gmail.com
General information about the home buying process, not lending advice, not legal or tax advice, and not a commitment to lend. Loan terms, qualifying requirements, and documentation standards are set by lenders and investors and change without notice. Verify all figures with a licensed lender before making a financial decision. Preferred lender introductions are offered at no obligation; I receive no compensation for them.