Behind the Vault

Buying your first home is an exciting milestone, but it can also be complex. Many first-time buyers make the mistake of only looking at the purchase price and overlooking other costs. Let's break down the expenses you should plan for on your way to homeownership.¹

Down Payment

The down payment is often the largest upfront cost. While some loans allow for as little as 3% down, a typical range is 3-20% of the home's purchase price. Remember, a larger down payment can lead to better loan terms and lower monthly payments.

Closing Costs

Expect to pay 2-5% of your loan amount in closing costs. These include:

• Appraisal fee
• Home inspection
• Title search and insurance
• Attorney fees
• Loan origination fees
• Recording fees

Property Taxes

Property tax rates vary widely by location. These are often paid annually or semi-annually and can be a significant ongoing expense.

Homeowners Insurance & Private Mortgage Insurance (PMI)

Most lenders require homeowner’s insurance. The cost depends on factors like your home's value, location, and the coverage you choose. As for PMI, you'll likely need it if your down payment is less than 20%. This protects the lender if you default on your loan.

Moving Expenses

Don't forget to budget for moving! Costs can range from a few hundred dollars for a DIY move with rental trucks to several thousand for professional movers.

Maintenance, Repairs, and Utilities

As a homeowner, you're responsible for all repairs and maintenance. A good rule of thumb is to budget 1-3% of your home's value annually for these expenses. Utility costs in a house are often higher than in an apartment—factor in electricity, gas, water, sewer, trash collection, and internet/cable.

Furniture and Appliances

You may need to purchase new furniture or appliances for your home. These costs can add up quickly.

Homeowners Association (HOA) Fees

If you're buying in a planned community or condo, you may have HOA fees. These fees can be charged monthly or annually.

Remember, the costs of homeownership extend far beyond the purchase price. By understanding and preparing for these expenses, you can avoid financial surprises and enjoy your new home with peace of mind.

Are you a first-time homebuyer? What other costs are you concerned about? Apply for a home loan online or reach out to us on familytrust.org using the chat feature to hear from us during business hours. Give us a call at 803-367-4100 and let us know you’d like help on your homebuying journey.

¹Loan terms, including down payment and interest rates, closing costs, and insurance requirements vary based on the loan type, lender, location, and personal circumstances.  Private Mortgage Insurance (PMI) typically applies to conventional loans with less than a 20% down payment, but requirements may vary depending on the loan type. All loans are subject to credit approval, and qualification is based on creditworthiness, income, and other underwriting factors. The costs provided here are examples and may not include all potential expenses related to homeownership. For personalized loan options and cost estimates, please reach out to us.