The amount of cash that is necessary depends on a number of items. Generally speaking, though, you will need to supply:
Earnest Money: The deposit that is supplied when you make an offer on the house
Down Payment: A percentage of the cost of the home that is due at settlement
Closing Costs: Costs associated with processing paperwork to purchase or refinance a house
For homebuyers in California, I offer a unique service. If you choose to use me to represent you as you buyer's agent in addition to securing your financing, I can usually credit several thousand dollars towards your closing costs.
This, combined with 100% financing means you can buy a home with almost no cash out of your pocket. Call me for further details.
Even though you're under the impression that all your closing costs will be paid due to seller concessions, sometimes lenders ask for more than what your loan officer expects, such as 6 months tax reserves, when normally it would be 3 months, etc. Don't be surprised if you have to supply a pittance at the closing table.
You will be provided with a HUD (settlement statement) before closing which details the closing costs and the exact amount you need to bring to the table. A good broker will be able to help you calculate with good accuracy (not exact) what you charges will be.
Although one can easily obtain mortgage financing without putting up much cash investment, a homebuyer can often get better loan terms with a larger down payment. home buyers with at least 20% down payment often get the lowest interest rates available.
Don't forget that you will also need to purchase homeowner's insurance in order to complete the transaction. You will have to prove that a full year of homeowner's insurance has been paid for. If you think that you may be a little short on cash, consider putting down less earnest money in order to cover the homeowner's insurance. Many times you can save money on your homeowner's insurance by going to the same person that provides you with your car insurance and any other type of insurance you may have.
Down payment money can often be taken from retirement accounts subject to some restrictions. Contact your mortgage professional and your tax professional to see if a loan from your retirement account or an early withdrawal may be right for you.
If you are in a situation where you would rather save your money then lock it into a home, there is always the possibility of asking for a seller concession and try to get approved for 100% mortgage financing.
In some cases it is even possible to purchase a home with only slightest, or in some instances, even no earnest money deposit. Combined with seller concessions and/or no closing cost loans, it is possible to get into a home with actually no out of pocket expenses.
While this it is possible in today's lending climate to buy a home with literally no money down, it behooves the borrower to at least expect and prepare for some minimal expenses. Look at it this way, if you can buy a home for as little as first and last months deposit for a rental home, you are way ahead.
You must be prepared to come up with the closing costs plus 1 years worth of homeowners insurance upfront, pay for any application fees, appraisal fees and inspection fees.
Look at it from a lender's perspective: If you put a large downpayment into a home, you aren't likely going to default. With this lower risk comes better terms on your mortgage. While you may need no cash to purchase a home, having cash will allow you to secure a lower rate on your mortgage.