3 Hidden Costs Buyers Forget When Purchasing a Home
What Every First-Time Buyer Should Know Before Closing the Deal
When you're house hunting, it's easy to focus on the purchase price and monthly mortgage payments. But many first-time buyers are caught off guard by the additional costs that come with buying a home. These hidden expenses can add up quickly—and knowing what to expect can help you plan more effectively and avoid surprises.
Here are three common hidden costs that every buyer should keep in mind:
1. Closing Costs
While your down payment often gets the most attention, closing costs are an essential part of the transaction—and they’re not cheap. These fees typically range from 2% to 5% of the home's purchase price and include things like:
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Title insurance
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Attorney fees
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Appraisal and inspection fees
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Loan origination charges
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Prepaid taxes and insurance
Many buyers are surprised when they learn how much they owe at the closing table. It’s important to request a Loan Estimate from your lender early in the process so you can budget for these expenses accordingly.
2. Ongoing Maintenance and Repairs
Unlike renting, owning a home means you’re responsible for everything—from a leaky faucet to a broken HVAC system. Industry experts recommend setting aside 1%–3% of your home's value each year for maintenance and unexpected repairs.
Even newer homes require upkeep like gutter cleaning, lawn care, HVAC servicing, and minor fixes. If you're buying an older home or a fixer-upper, those costs could be even higher. Having a maintenance fund can give you peace of mind and keep small problems from turning into big ones.
3. Property Taxes and Homeowners Insurance
While these are often rolled into your mortgage payment through an escrow account, many buyers underestimate how much they’ll pay—especially if they’re relocating from an area with lower taxes or insurance rates.
In addition to annual property taxes (which can increase if your home is reassessed), you'll need homeowners insurance—and possibly extra coverage if your home is in a flood zone or high-risk area. Always ask your lender or insurance agent for estimates before finalizing your budget.
Final Thoughts
Buying a home is a big milestone, and preparation is key to enjoying it without stress. By planning for these hidden costs—closing expenses, maintenance, and taxes/insurance—you can move into your new home with confidence.
Thinking about buying in North Alabama?
Our team at Embry Group Real Estate is here to guide you through every step of the process. From unexpected costs to negotiating the best deal, we’ll make sure you’re prepared and informed from start to finish. Let’s find the home that’s right for you—without any surprises.