Buying a home is an exciting milestone—but if you’re only budgeting for the listing price, you could be in for a surprise. The true cost of homeownership goes far beyond the down payment and monthly mortgage. To avoid financial stress and stay prepared, it’s crucial to factor in these often-overlooked expenses.
Here’s a breakdown of the hidden homebuying costs you should absolutely plan for.
1. Closing Costs
What it is: A collection of fees required to finalize your mortgage and transfer ownership.
Average cost: 2%–5% of the home’s purchase price.
What’s included: Loan origination fees, title insurance, escrow fees, attorney fees, and more.
2. Home Inspection and Appraisal
What it is: The inspection ensures the property is in good condition, while the appraisal confirms the value for the lender.
Average cost: $300–$600 for an inspection, $400–$700 for an appraisal.
3. Property Taxes
What it is: Ongoing annual taxes based on your home’s assessed value.
How it varies: Rates differ by location and are often included in your monthly mortgage payment.
4. Homeowners Insurance
What it is: Protects you against damage or liability.
Average cost: $1,000–$2,000 annually depending on your coverage and location.
5. HOA Fees
What it is: Monthly or annual fees if your home is in a community governed by a homeowners association.
Range: $100–$500+ per month, depending on amenities.
6. Moving Costs
What it is: The cost of relocating your belongings, whether you hire movers or rent a truck.
Average cost: $500–$2,500 based on distance and services.
7. Utility Set-Up and Deposits
What it is: Many providers require deposits when starting service in a new home.
Examples: Electricity, gas, water, trash, internet, and security systems.
8. Maintenance and Repairs
What it is: Even new homes need upkeep. From replacing air filters to fixing leaks, costs add up fast.
Rule of thumb: Budget 1% of the home’s value annually for maintenance.
9. Furniture and Décor
What it is: You may need (or want) new furniture, appliances, or décor to suit your space.
Tip: Make a separate post-move budget for these purchases to avoid overspending.
10. Emergency Fund
Why it’s essential: Unplanned expenses like a broken furnace or storm damage can hit hard.
Suggestion: Set aside 3–6 months of living expenses for peace of mind.
Final Thoughts
While the listing price is the starting point, the real cost of buying a home includes many moving parts. Knowing what to expect helps you stay ahead of the curve—and your budget. When you’re prepared, the path to homeownership becomes smoother and more rewarding.
Need help navigating your homebuying journey? Let’s talk about creating a smart, realistic budget that fits your goals.