Expenses First-Time Buyers Need to Save For
The down payment is just one piece of the puzzle. Understanding all the costs involved helps you budget realistically and avoid surprises.
Down Payment
Depending on your loan type, this ranges from 0% (VA, USDA) to 3% (conventional) to 3.5% (FHA) or more. Putting more down reduces your monthly payment and may eliminate mortgage insurance.
Closing Costs
Typically 2-5% of the loan amount, covering appraisal fees, title insurance, loan origination fees, attorney fees, escrow deposits, and recording fees. On a $300,000 loan, expect $6,000-$15,000.
Home Inspection
A professional inspection costs $300-$600 and is paid upfront, separate from closing. It’s worth every penny to identify potential problems before you buy.
Moving Costs
Professional movers typically charge $1,000-$5,000 depending on distance and volume. Budget for packing supplies, utility deposits, and address change fees as well.
Immediate Home Expenses
New locks, basic maintenance tools, lawn care equipment, window treatments, and any furniture you need. These small costs add up quickly — budget $1,000-$3,000 for the basics.
Emergency Reserve
Lenders and financial advisors recommend keeping 3-6 months of housing expenses in reserve after closing. This cushion protects you against unexpected repairs or income disruptions.