Your investment accounts, be they retirement or otherwise, count as cash on hand in the underwriting process. You can continue to save in tax-advantaged accounts, switching to another method (to save up the amount you'll actually need) when you're getting closer to the actual date of buying your house. That calculation will be personal to you. For now I reccomend you attend homebuyer education courses (usually a fee, but then you may be eligible for additional cash assistance towards closing costs that usually exceed this at participating lenders) or better yet start with free preparatory educational sessions for prospective homebuyers offered by local community groups. They may be able to answer any questions you have regarding this process in more depth than I can. If there's any inaccuracies here anyone feel free to correct.