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Are you gearing up to start your house hunt? Maybe you've even been preapproved for a mortgage.

Either way, you likely know how important it is to save up when planning to purchase a home. However, your total home buying costs will entail more expenses than just the sale price of the home.

To ensure you have enough saved and are aware of all the costs associated with buying a home, let's run through the most important costs you'll need to save for.


While some government-backed mortgages don't require a down payment, many conventional options from banks and other lenders do. A down payment is upfront money you commit from your savings — among other sources. It's a percentage of the total sales price and often required to reduce risk for the lender.


You'll have mortgage payments to make every month, so be sure to update your budget. Remember, each payment goes toward both principal (the amount you initially borrowed) plus interest. The interest you pay is determined by your rate, and whether it is fixed or variable.


Don't forget about closing costs. These upfront expenses are charged for the various processes required to actually close the mortgage so you can buy your home. Closing costs can include, but are not limited to:

  • Mortgage origination fees
  • Fees for appraisal, inspections and other services
  • Underwriting fees
  • Title insurance
  • Deed transfer
  • Government fees

Before you close the home loan, you should receive a loan estimate that itemizes all these costs. This should provide you with transparency needed to save accordingly.


You may be required to pay private mortgage insurance (PMI) if your credit score is poor or you plan to make a down payment of less than 20%. These premiums are paid monthly and protect the lender, not you, from default. The good news is that after a period of time you can remove PMI.


If you work with a real estate agent, you may be on the hook for a portion of their fees. Sometimes, sellers include fees or a commission in the price of the home, which just means you're paying one way or another.


Everybody's favorite, property taxes are levied by local governments for various public revenue reasons. It's important to research the rates of the market you plan to buy in, as well as how escrow works.


Your home is likely your biggest investment, so you'll want to protect it. Homeowners insurance offers protection from events like fires, theft, property damage, general liability and other forms of loss. The cost will depend on the scope of your policy. If you live in a flood-prone area, you'll need to get separate flood insurance.


Ongoing maintenance costs are going to pop up from time to time. Having enough money saved to repair a water heater or get new windows will ensure your home is safe, livable and comfortable.

Are you figuring out your savings plan before you buy a home? Reach out to The Federal Savings Bank today for budgeting help, or to start the mortgage application process.