Purchase and financing
Home price, explained
The home price is the amount you and the seller agree the home will cost. Money from the seller or lender may help pay other costs, but it does not change this price. The asking price is the seller's starting price. The appraised value is an expert's estimate of what the home is worth.
Published and maintained by Kevin Song for Your Home Cost. Last reviewed: . How guides are reviewed.
3 cited sources
Why it changes your estimate
The calculator subtracts your down payment from the home price to find the starting loan amount. It also uses the price for percentage-based planning costs, including property tax, maintenance savings, and closing costs. Until a price is entered, those calculations cannot describe a real purchase.
What to enter
Enter the purchase price you expect to offer or agree to pay. If you are only browsing, try a possible price to see the monthly result. Leave closing costs, moving expenses, immediate repairs, and furniture out of this field because the calculator handles those separately.
Good to know
The planning benchmark used by the calculator is the Census American Community Survey median owner-estimated value for owner-occupied homes in the named area and data vintage. Median means half of the reported values were lower and half were higher. It is a survey estimate of owners' opinions, not a median of recent sale prices, current listings, or appraisals, and it can lag a fast-changing market. Use it only as area context. An appraisal is the lender's professional opinion of this property's value; if it is below the agreed price, the lender may base the loan on the lower value and the buyer may need more cash, renegotiate, or use a contract right to leave.
Test a price before it becomes an offer
Use three price scenarios rather than treating one listing price as a forecast. A lower, target, and upper scenario can show how the loan amount, closing-cost allowance, property-tax estimate, and maintenance reserve move together. Keep the proposed down payment realistic in each scenario; otherwise a higher price can quietly consume cash that was meant for closing, repairs, or an emergency reserve.
Before an offer, decide which number is a firm household limit and which is only a browsing assumption. After a contract is signed, replace the scenario with the agreed purchase price, but continue tracking the appraisal separately. If the appraisal is lower, ask the lender which value it will use and recalculate the required cash before waiving or passing any contract deadline.
- Run lower, target, and upper prices with the cash you can actually contribute.
- Keep the asking price, contract price, and appraised value as separate facts.
- Recheck cash needs immediately if negotiations or the appraisal change the scenario.
Worked example
If the home price is $400,000 and you put $80,000 down, the starting loan is about $320,000 before any costs that may be added to the loan.
Sources and citations
These references support the definitions, planning guidance, and program rules above. A citation does not mean its publisher endorses this guide.
Original planning exercise
What does another $25,000 of purchase price change?
A buyer compares $400,000 and $425,000 homes while keeping the down payment at $80,000. Assume 6.5% over 30 years, property tax at 1.2% of price, maintenance at 1%, and closing costs at 3%. Keep insurance, HOA and utilities unchanged to isolate the price effect.
Illustrative assumptions, not quotes or forecasts. Calculations by Your Home Cost; mortgage payment examples use the calculator's shared fixed-rate formula.
| Option or step | Calculation | Planning result |
|---|---|---|
| $400,000 home | $320,000 loan; $400 tax + $333.33 maintenance per month | $2,755.95/month for these three costs |
| $425,000 home | $345,000 loan; $425 tax + $354.17 maintenance per month | $2,959.80/month for these three costs |
| Cash difference | $25,000 × 3% | $750 more closing-cost allowance; same down payment |
What the comparison tells you
The price increase affects several budget lines at once. It also reduces the down-payment percentage from 20% to about 18.82%; a lender's PMI or pricing may change. That effect is not in this three-line subtotal and must be checked separately.
Evidence to collect
Obtain address-specific tax and insurance estimates for both homes. A fixed percentage comparison isolates arithmetic; it does not establish that the two properties have equal tax treatment, condition or operating costs.
Apply it in the calculator
After changing Home price, re-enter $80,000 in Down payment: this calculator otherwise preserves the previous down-payment percentage. Then compare monthly and upfront costs together.
Original planning exercise added . Source-review dates above are maintained separately.