You’re ready to take the plunge into homeownership. You’ve been researching your local market and have targeted the perfect neighborhood in an affordable price range. Your credit score is the best it’s ever been and you have a nice tidy down payment saved up.  You’re ready to go, right?

Well, you’re ALMOST ready to go. Many times homebuyers forget that there are some other costs involved in buying a home besides the down payment.  Forgetting those hidden costs can cause a lot of stress when you’re buying a home. 

However, if you’re aware of these 6 hidden costs to buying a home and make sure you save for them in addition to your down payment, your home buying transaction will be smooth and stress free.

1. Home Inspection

Once your offer on your dream home is accepted, it’s time to get your home inspection. Unless, you’re purchasing a newly built home and you’ll be the first owner, do not….I repeat…DO NOT…skip the home inspection.  The home inspection tells you if there’s anything serious (or not so serious) wrong with the home.  A good inspector will also help educate you on the basic maintenance and upkeep of your home.  Plan to spend anywhere from $300-$500 for your home inspection.  It could cost even more if you decide to include extra inspections like pest and radon inspections.

2. Appraisal

Once you’ve made it through the inspection, your lender will need to order an appraisal of the house.  That’s because banks are agreeing to finance a certain percentage of the appraised value of the home NOT the sale price.  The goal is for the appraised value to be the same as the sale price (but that’s a different blog post for a different day).  If you’re getting a mortgage, then you’re paying for an appraisal.  It’s not optional.  Appraisal costs vary depending on the type of loan you are getting.  FHA and VA loan appraisals cost more than those for conventional loans.  Plan to spend anywhere between $200-$500 on your appraisal.

3.Title Fees

Both buyers and sellers have to pay fees associated with the title company’s services. The title company organizes all the paperwork, provides notary services at closing, researches the home’s title, registers the sale with the country registrar, disburses all the monies for fees, commissions, etc and a number of other duties to make sure you own this home at the end of all the paperwork signing.  Expect the title fees to be around $200-$400.

4. Survey

The survey will detail your properties boundaries, point out any easements or encroachments and give you details of the dimensions of the land and home.  It may also outline key features of the property.  Depending on your lender and where you live you might be required to get this or it can be optional.  A survey can cost you anywhere from $200-$400.

5. Closing Costs

Closing costs are a bit of a catch all.  These include any fees from your lender, pre-paid taxes, homeowners association dues or any other fees that might be unique to your market.  Generally, the closing costs are percentage of the loan amount.  Plan to spend about 5% of your total loan amount in closing costs.

6. Homeowner’s Insurance

Your bank will not give you a mortgage unless you pay for the first full year of homeowner’s insurance upfront.  Homeowner’s insurance rates are dependent on a number of factors including size, age, and location of the home among other things.  Rates also vary from state to state.  If you’re in Ohio, like I am, budget for $600-$700. If you’re in a state that is prone to natural disasters (like California with earthquakes or Florida with hurricanes), you can expect to pay about double that.

Buying a home is exhilarating and overwhelming all at the same time.  If you make sure you’re as prepared as possible for all the expenses involved in the process, you’re going to feel MUCH more exhilarated and MUCH less overwhelmed so you can fully enjoy that house warming party once you get the keys.