Hidden Costs of Buying a House
The down payment is just the visible cost. First-time buyers routinely underestimate closing costs, ongoing maintenance, and surprise expenses. Here's what to actually budget for.
Quick answer
Plan for an extra 3–6% of the purchase price for closing costs upfront, plus 1–2% of home value annually for ongoing maintenance. On a $350K home, that's $10K–$20K at closing and $3,500–$7,000 each year.
Upfront (closing costs)
- Loan origination fees: 0.5–1% of loan
- Appraisal: $400–$700
- Home inspection: $400–$600
- Title insurance: 0.5–1% of price
- Recording and transfer taxes: varies, $500–$3,000
- Prepaid taxes and insurance escrow: 2–6 months in advance
- Attorney fees (where applicable): $500–$1,500
Total: 3–6% of the purchase price. On a $350K home, expect $10,500–$21,000 on top of the down payment.
Move-in costs
- Movers: $500–$3,000
- Utility deposits / setup: $100–$500
- Initial repairs and upgrades: $1,000–$10,000+
- New furniture and appliances: $2,000–$15,000
- Window treatments, paint, basic décor: $500–$5,000
Ongoing annual costs
- Property taxes: 0.5–2.5% of value (varies widely by state)
- Homeowner's insurance: $1,200–$3,000/year
- HOA fees (if applicable): $200–$700/month
- Routine maintenance: 1% of home value annually as a rule of thumb
- Utilities: typically 30–50% higher than renting (you cover everything)
- Lawn / pest / pool service: $500–$3,000/year
Surprise expenses
- Roof replacement: $8,000–$25,000 (every 20–30 years)
- HVAC: $5,000–$10,000 (every 15–20 years)
- Water heater: $1,500–$3,500 (every 8–12 years)
- Major appliance replacement: $1,000–$3,000
- Plumbing emergency: $500–$5,000+
Most homeowners face at least one $5,000+ unplanned repair within the first 5 years. Build a separate home maintenance fund of $5K–$10K early.
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Frequently Asked Questions
Can closing costs be rolled into the loan?
Sometimes — through a 'no-closing-cost' loan that bumps the rate slightly. You pay over time instead of upfront.
Are sellers ever responsible for closing costs?
Yes — buyers can negotiate seller concessions of 3–6% of the price, especially in slower markets. Always ask.
How much should I keep in cash after closing?
Aim for 3–6 months of mortgage payments plus your normal emergency fund. Don't drain your savings to maximize the down payment.
Are there tax deductions that offset costs?
Mortgage interest and property tax deductions can lower your effective cost — but only if you itemize, and the standard deduction now beats itemizing for most middle-income buyers.