How Much Money Do You Really Need to Buy a Home in Los Angeles?
Let’s get clear and specific, because vague advice isn’t helpful when you're planning your first home purchase in Los Angeles.
To buy a home in LA, most first-time buyers should plan for:
Down Payment: 3% – 20% of purchase price. Most LA first-timers put 5–10%, not 20%.
Closing Costs: 2% – 3% of purchase price. Lender, escrow, title fees, taxes, insurance.
Inspections: $600 – $2,000+. General + sewer + termite (very LA-specific) are always recommended, and more may be required depending on the home.
Appraisal: $600 – $900. Paid during escrow.
Emergency / Move-in Cushion: $5,000 – $10,000+. Move-in costs, repairs, furniture. This is really dependent on the person, their needs, and the state of the property. You want to make sure you have an emergency fund when you buy a home, because issues will always come up, and you don’t want to be left with no funds to address them.
Now, please keep in mind that all of the finances involved in purchasing a home are best advised by.a financial planner in collaboration with your lender (if using one). Everyone has a different financial picture, so the example below is strictly “in theory’ and for the sake of a visualization.
Shortcut math for a $950,000 home in Los Angeles
Assuming 5% down + typical closing costs:
5% Down Payment: $47,500
Closing Costs (~2.5%): $23,750
Inspection + Appraisal: $2,000
Move-in / Emergency Fund: $7,500
Target savings for a $950k purchase: ~$80,000 – $90,000 total
And yes, some buyers do it with less (assistance, credits, etc.). And yes, others bring more to lower payments & strengthen offers. But if you're aiming for ~$950k, this gives you a meaningful, realistic starting point.
“Do I really need 20% down in LA?”
Short answer: No. Real-life down payments often seen in LA:
3% Conventional: Many first-time buyers w/ strong credit
3.5% FHA: Buyers needing flexibility on credit/income
5–10% Conventional: The most common scenario in LA
20%+: Buyers optimizing payments/jumbo/competitive edge
The myth that you have to put 20% down holds a lot of people back unnecessarily. You can absolutely buy in LA without 20% down. Planning and strategy is the key.
Income needed to afford ~ $950,000 in LA
Let’s look at estimated monthly costs with 5% down:
Mortgage: ~$5,300 – $5,900+ (rate dependent)
Property taxes: ~$1,000/month
Homeowners insurance: ~$150 – $200/month
HOA (if condo/townhome): $350 – $800/month typical
Total estimated monthly payment: ~$6,500 – $7,900/month
Depending on interest rates, HOA fees, taxes, & loan product, the income needed to qualify comfortably: ~$170,000 – $210,000 household income (approx). Don’t panic if you're not there yet. Many buyers work toward this over 6–24 months. My job is helping you build your plan.
Your real game plan in LA:
Don’t wait until you “feel ready. The most successful first-time buyers here:
Get educated early. Join my LA First-Time Buyer Workshop in Los Feliz or Zoom.
Talk to a lender to see real numbers.
Start touring neighborhoods sooner than expected, but connect with an agent first.
Use time to build credit, savings, & strategy.
Make buying a plan with the guidance of a financial planner. Don’t make it guess work.
The buying process for first time home buyers should feel empowering. If any of the resources above don’t apply to you, reach out! We will take it one smart step at a time.