Saving up for a New Home? Here Are All the Costs You Need to Know

Once youve found the perfect home and secured the loan, all thats left to do is start chipping away at those mortgage paymentsright? In actuality, there are a handful of other, often-overlooked expenses that come with buying a home, but as long as you know what youre getting into, theyre plenty manageable.

Take a look at our comprehensive list of all the costs of buying a home.

One-Time Payments & Closing Costs

Closing Costs

For buyers, closing costs are typically low and range from 2-5% of your purchase price. A lot of these costs are one-time expenses, and totals can vary from state-to-state.

If you want a better idea of what closing costs could be for you, check out this helpful guide on the average payments for each state.

Miscellaneous Fees

There are quite a bit of one-time fees bundled into your closing costs, but most of them are pretty inexpensive. Some of the most common expenses include the home inspection, appraisal, credit report, deed recording, land survey, notary fees, title insurance, and document prep fees.

Recurring Payments

Mortgage Payments

Mortgage payments are the most obvious cost when buying a home. These are your predictable, monthly payments decided by both the final price of your home and your down paymentin addition to a few other bundled costs. A larger down payment means a smaller mortgage payment, and its a good idea to pay this off quickly, since it will accumulate interest.

Property Taxes

Property tax payments dont go towards just one thingthey actually cover quite a bit, like road construction, community maintenance, public works, and local government salaries. The exact amount youll pay in property tax is calculated by the county based on your homes value, and the rates tend to rise and fall over time. Many buyers pay their property taxes through an escrow account set up by the lender.

Homeowners Insurance

Its better to have insurance and not need it than need insurance and not have it, so homeowners insurance is pretty crucial to home owning. While its almost always required when you get a mortgage and then bundled into your monthly payments, be sure to double-check that youre covered.

Private Mortgage Insurance

If you cant afford a 20% down payment on your home, youll have to pay PMI as a way to ensure that the lender wont go under if you default on your loan. You dont have to pay PMI foreverit ends once you pay off 78% or more of the principal amountbut until then, expect to pay up to 2% of your loan amount annually.

HOA Fees

Moving to a neighborhood with an HOA? Your dues can range anywhere from under a hundred dollars to over a thousand, but they come with perks like landscaping and exterior maintenance, and some even include added benefits like swimming pools and fitness centers. Not all neighborhoods have an HOA, but your agent can tell you what your payments will be if yours does.

Utilities

Lastly, utility fees can come as a surprise to new homeowners who are used to renting. Depending on the size of your home, you can expect to pay a few hundred dollars per month for water, electricity, heating and cooling, and trash services. If youre curious what your utility bills might look like, just ask your agent, and they can likely secure a few statements from the past owners.

Ready to Make an Offer?

When it comes to buying a home, the most important thing you can do is be prepared. While there are a handful of costs to keep in mind, the satisfaction of calling a place your own is well-worth it in the end.

Are you ready to get started on your home-buying journey? With years of professional and local experience, our team knows all about navigating the expenses that come with buying. Give us a call today to get a better idea of your costs, and lets get started!

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