Buying a home isn’t just down payment + monthly mortgage. Between inspections, taxes, insurance, and “didn’t-see-that-coming” charges, many buyers underestimate cash needed to close (and to settle in). Use this guide to spot the big gotchas, learn what’s normal, and build a realistic budget.
A quick budgeting rule of thumb
Plan for ~3–5% of the purchase price in closing costs, plus 1–3% for immediate fixes and move-in. If you want a simple target, set aside a “sidecar fund” of ~5–7% on top of your down payment.
1) Home inspection(s)
What it is: A general inspection; you might add sewer scope, radon, termite/pest, or mold.
Typical range: $300–$900+ (specialty tests extra).
Budget tip: Always budget for at least one specialty test if the home is older or has a basement or septic.
2) Appraisal fee
What it is: Lender-ordered valuation.
Typical range: $500–$800.
Budget tip: Rural, complex, or jumbo properties can price higher—pad your estimate.
3) Property survey
What it is: Confirms boundaries/easements.
Typical range: $400–$900.
Budget tip: Not required everywhere; your agent or attorney will know local norms.
4) Lender fees (origination, underwriting, credit report)
What it is: The cost to process and approve your loan.
Typical range: ~0.5%–1.0% of the loan amount (sometimes flat fees).
Budget tip: Request the Loan Estimate early and comparison-shop.
5) Discount points (optional)
What it is: Upfront fee to lower your interest rate.
Typical range: 0.5–2.0% of the loan amount (1 point = 1%).
Budget tip: Do the break-even math; if you’ll move or refi soon, points rarely pay off.
6) Title insurance & settlement
What it is: Title search, closing/settlement services, lender’s and optional owner’s policy.
Typical range: ~$1,000–$3,000 (state-driven).
Budget tip: Ask for a simultaneous-issue discount (common when buying both policies).
7) Escrow “prepaids”: property taxes
What it is: Initial deposit into your escrow for taxes.
Typical range: 2–6 months of taxes.
Budget tip: Closing near tax due dates can increase the deposit—timing matters.
8) Escrow “prepaids”: homeowners insurance
What it is: First year’s premium + escrow cushion.
Typical range: 2–12 months of premium.
Budget tip: Shop carriers before you go under contract; bundling can save.
9) Prepaid interest (per-diem)
What it is: Interest from closing day to month-end.
Typical range: ~$10–$80 per day, depending on loan amount and rate.
Budget tip: Closing near month-end reduces this line item (but don’t force bad timing).
10) Mortgage insurance (upfront portions)
What it is: Upfront premiums/fees tied to low-down-payment programs (e.g., FHA/USDA) in addition to monthly PMI/MIP.
Typical range: ~0.5–2.0% of the loan amount (program-specific).
Budget tip: Compare total 5-year cost (upfront + monthly), not just the rate.
11) HOA/condo transfer & capital contributions
What it is: One-time fees when you join an association; may include move-in/elevator deposits.
Typical range: $100–$1,500+.
Budget tip: Ask for the resale package early; fees are written there.
12) Attorney/closing agent + recording/courier
What it is: Legal review (in attorney states) or settlement/escrow company; plus recording and shipping fees.
Typical range: $800–$2,000.
Budget tip: In some areas, buyers can choose the closing agent—compare quotes.
13) Transfer taxes & stamps
What it is: City/state taxes on the property transfer.
Typical range: ~0.1%–2.0% of purchase price (highly local).
Budget tip: Who pays varies by market—verify if buyer, seller, or split.
14) Rate-lock extensions or float-down fees (if used)
What it is: Fee if your rate lock expires or you opt to float down to a lower rate.
Typical range: $250–$1,000+.
Budget tip: Align your lock length with your closing timeline (add a small buffer).
15) Move-in & Day-1 essentials
What it is: Movers/truck, utility deposits, locks/rekeying, filters, detectors, small appliances, tools, paint.
Typical range: $300–$1,500+ (repairs can run 1–3% of price).
Budget tip: Create a “first 30 days” list; negotiate seller credits if inspection finds issues.
Sample budget formula you can copy
- Closing costs: 2–5% of purchase price
- Immediate repairs/essentials: 1–3%
- Moving & setup: 0.5–1%
Example on a $400,000 home: Plan on ~$12,000–$36,000 beyond the down payment (range reflects local taxes, program fees, and condition).
Smart ways to keep costs down
- Shop three lenders and compare total 5-year cost, not just rate.
- Time your closing to avoid large prepaids (but keep inspection/financing timelines realistic).
- Ask for seller credits to offset repairs or closing costs.
- Bundle insurance and raise deductibles if appropriate.
- Skip unnecessary points if you’ll sell/refi within a few years.