Most buyers spend months saving for a down payment, which is a big accomplishment. But the down payment is not the only check you will write. Several other expenses come up before, during and after closing, and they catch plenty of people off guard. Knowing about them in advance helps you set a realistic budget and keeps a little cushion in your account when you get your keys.
A professional home inspection is one of the best investments you can make during a purchase, and you typically pay for it upfront. Depending on the home and location, you may also want specialty inspections, such as termite, sewer line, roof, mold or a wind mitigation report for insurance purposes. Prices vary by area and home size, so ask for quotes early.
Your lender will usually require an appraisal to confirm the home’s value. This fee is often paid upfront or included in your closing costs.
Closing costs are the fees involved in finalizing your loan and transferring ownership. They can add up to a meaningful amount, so it is smart to plan for them separately from your down payment. Common items include:
Your Loan Estimate, which your lender provides shortly after you apply, breaks these down so you know what to expect. In some cases, you may be able to negotiate seller credits toward closing costs, depending on the market and your contract.
Moving costs are easy to underestimate. Whether you hire movers or rent a truck, set aside money for:
Getting multiple quotes and booking early, especially during busy months, can help keep costs in check.
These are ongoing costs that are often bundled into your monthly mortgage payment through an escrow account. Both vary widely by location and coverage. In some areas, flood or windstorm coverage adds to your insurance bill. Taxes may also change after a sale, since the home may be reassessed at the new price.
If the home is in a community with a homeowners association, expect regular dues and possibly special assessments for larger projects. Ask for the HOA budget and rules before you buy.
As an owner, you are the one who calls the plumber. Budget for routine upkeep, such as HVAC service, pest control and lawn care, and keep an emergency fund for bigger surprises like a failed water heater or roof repair. Many homeowners set aside a small amount each month just for home costs.
New homes often come with new needs: window coverings, a lawn mower, a few pieces of furniture or a fresh coat of paint. These add up quickly, so prioritize what you need right away and spread the rest out over time.
A realistic plan accounts for both one-time costs and ongoing expenses. Our mortgage calculator can help you estimate a full monthly payment, including taxes and insurance. If saving for closing costs and a down payment at the same time feels daunting, explore our low down payment options.
FLO Mortgage is happy to walk you through what to expect so there are fewer surprises. Reach out to our team and a loan officer will help you plan with confidence.
A FLO Mortgage loan officer can walk through your options, run real numbers and help you choose a loan that fits.
This article is for general education and is not a commitment to lend. All loans are subject to credit approval, underwriting guidelines and program availability. FLO Mortgage, Company NMLS #1835856. Equal Housing Opportunity.
© FLO Mortgage, LLC. All rights reserved. Company NMLS #1835856.