Finance1 min read·Updated March 9, 2026
Home Buying Costs Guide: Every Cost to Budget Before You Close
A complete breakdown of home buying costs beyond the purchase price — closing costs, inspection fees, moving costs, and first-year ownership expenses to budget for.
Advertisement
Closing Costs: 2–5% of Purchase Price
Closing costs are fees paid at settlement, separate from your down payment. On a $400,000 home, expect $8,000–$20,000 in closing costs. Main components:
- Loan origination fee: 0.5–1% of loan amount ($2,000–$4,000)
- Appraisal: $300–$700
- Title insurance (owner + lender): $1,000–$3,000 depending on state
- Prepaid interest: Depends on closing date (more interest paid for month if closing early in month)
- Property tax escrow: 2–6 months upfront
- Homeowner's insurance: 1 year upfront ($1,000–$4,000+)
- Recording fees: $50–$250
Pre-Closing Costs
- Home inspection: $300–$600. Non-negotiable — always get one.
- Specialized inspections: Sewer scope ($150–$300), radon ($100–$300), mold ($300–$600), termite (often included in general inspection)
- Earnest money: 1–3% of purchase price (goes toward down payment at closing, but cash you need upfront)
First-Year Costs After Closing
Budget for immediate and first-year expenses: moving costs ($1,000–$5,000+), immediate repairs and improvements ($2,000–$10,000+ depending on home condition), appliances if not included, window treatments and blinds ($500–$3,000), landscaping, and setting up utilities. Budget 1–2% of home value annually for ongoing maintenance and repairs.
Advertisement
Frequently Asked Questions
Can I negotiate closing costs?
Some items are fixed by third parties (title insurance, recording fees, appraisal). The lender's origination fee, discount points, and some service fees are negotiable. 'No-closing-cost' mortgages exist — the costs are rolled into a slightly higher interest rate. In seller's markets, buyers sometimes negotiate for sellers to pay some closing costs, though this is more common in buyers' markets.
How much should I keep in savings after closing?
Most financial advisors recommend keeping 2–3% of home value in readily accessible savings for home repairs after closing. Running completely dry to make the down payment leaves you vulnerable to expensive, urgent repairs (roof leak, HVAC failure, plumbing emergency) with no financial buffer. Delay closing if needed to maintain a $5,000–$10,000+ emergency reserve.