Costs to Consider When Purchasing a New Home

When purchasing a home, it is important to keep in mind that the total cost includes more than just the original sale price. Planning for these unexpected costs is the best way to ensure a seamless home-buying experience. So, what are they?

Down Payment

A down payment is the cash you pay upfront when purchasing a home. This is your contribution toward the purchase and represents your initial ownership stake in the home. The required amount will vary by mortgage type.

Closing Costs

Closing costs are expenses, above the property’s price that are incurred at the closing of a real estate transaction. These costs can include application fees, origination and/or underwriting fees, title insurance, title search fee, and in some cases a transfer tax.


There are two types of insurance to consider when purchasing a new home:

Homeowner’s Insurance

This type of insurance protects you from unexpected damages to your home such as effects from a natural disaster, theft, or vandalism.

Private Mortgage Insurance

PMI provides protection for the lenders if the buyer defaults on their loan and is required when a homebuyer puts down less than 20% of their down payment. For FHA loans, insurance is required regardless of the amount of the down payment.


Homeowner’s Association fees are applicable when buying a home or condo in a community that is run by a homeowner’s association. They are used for services and amenities like security, landscaping, and recreation centers.  

Property Taxes

Property taxes are used to fund services like education, transportation, and community parks. They vary by geographic location and can increase along with the value of your home.

Move-In Expenses

Often overlooked, moving expenses are necessary to any home-buying experience. Some of these include hiring a moving truck or purchasing cleaning supplies.

Maintenance, Repairs, Utilities

Having a fund available for things like maintenance, repairs, and your new utility bill is always a good idea when purchasing a new home. Some experts suggest saving 1% of the home’s value as an emergency maintenance fund when these almost certain expenses arise.

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