How Much Money Do You Really Need to Buy a House in Arizona?

Where the 20% number comes from (and why it rarely applies to you)

20% down is the threshold that lets you avoid private mortgage insurance (PMI) on a conventional loan — it was never a requirement to buy a home. Most first-time buyers use loan products that require far less: conventional loans can go as low as 3% down, FHA loans require 3.5%, and VA and USDA loans can require 0% down for buyers who qualify.

Layer an Arizona down payment assistance program on top of one of those (see our guide to programs like Home in 5 Advantage), and it's common for first-time buyers to close with a total cash outlay in the low single-digit thousands, not tens of thousands.

Closing costs in Arizona

Closing costs — lender fees, title insurance, escrow fees, prepaid property taxes and insurance — typically run 2% to 4% of the purchase price in Arizona. On a $420,000 home, that's roughly $8,400 to $16,800, though a seller concession negotiated into your offer can cover a meaningful chunk of that.

One genuinely good piece of news: Arizona is one of only a handful of states with no real estate transfer tax. In states that charge one, it can add thousands of dollars to closing costs on its own. That's money you simply don't have to budget for here.

Earnest money is not an extra cost — it's part of what you already saved

Earnest money (typically around 1% of the purchase price in the Phoenix metro) is a deposit that shows the seller you're serious, held in escrow and applied toward your down payment or closing costs at closing — it's not money spent on top of everything else, just money that moves earlier in the process.

A realistic example

On a $420,000 first home with a 3.5% FHA down payment ($14,700) and average closing costs (call it $10,000), a buyer using a program like Home in 5 Advantage to cover down payment assistance could realistically walk into closing having spent well under $10,000 in cash from their own savings — sometimes far less depending on negotiated seller credits.

Conclusion

The number that actually matters isn't a generic percentage — it's what your specific loan type, the home price you're targeting, and the assistance programs you qualify for add up to. Matt runs this math with buyers before they ever start touring homes, so you're shopping with a real number instead of a guess.