sign saying the total cost of buying a home

When you come across a favorable mortgage offer, you may think, “Great! I can afford my dream home.” You may be able to, but the costs associated with buying a home go beyond the mortgage payment. To determine how much house you can afford, it’s important to factor in additional expenses, such as closing costs, insurance and taxes, before committing to a mortgage.

The price of a home can vary greatly depending on the location, size, and condition of the property. In this blog post, we will discuss the various costs associated with buying a home. We will also provide some tips on how to save money during the home-buying process.

Down Payment

One of the biggest costs associated with buying a home is the down payment. The down payment is the lump sum of money that you will pay upfront towards the purchase of your home. The amount of your down payment will depend on several factors, including the price of the home, your credit score, and the type of mortgage loan that you qualify for. In general, you will need to put down at least 20% of the purchase price of the home in order to get a mortgage loan. If you are unable to come up with a 20% down payment, there are several programs available that can help you with your down payment.

If you choose a conventional or FHA loan, a down payment is required. The amount of the down payment that’s needed is based on the home’s price and property type, as well as the loan product. For example, with an FHA loan, the minimum down payment is just $500 for a home that costs less than $50,000.

For a conventional loan, exactly how much depends on the lender and loan type — you might put down 3 percent, 10 percent, 20 percent or more. Currently, the average down payment here in Columbus is 7% for 1st time home-buyers and up to 17% for Repeat home-buyers.

graph showing the average down payment of a home buyer

It’s important to note that there are loans without a down payment requirement: 

USDA loans is one such loan type. However, there are certain requirements that a buyer has to qualify for to get this loan.

There is also a location requirement but it may not necessarily have to be in the country as you might expect, given the name. USDA stands for United States Department of Agriculture. Cities such as Marysville still qualify for USDA loans, though this may soon change so reach out to us to get the latest status of this loan.

Another no down payment loan type are VA loans. They are available to qualifying service members and veterans, which allows them to purchase a home with no down payment. The VA loan program is one of the most powerful benefits that veterans have, and it has helped millions of veterans and their families achieve homeownership.

If you are eligible for a VA loan, you will not be required to make a down payment. However there is a limit on the amount you can borrow on a VA loan. Check with your VA loan specialist or reach out to us to see what that amount currently is.

Closing Costs

When you buy a home, there are a number of fees and expenses that are associated with the transaction. These fees are collectively known as closing costs, and they can vary depending on the price of the home, the type of loan that you choose, and the state in which the property is located.

These range typically from 2 percent to 5 percent of the loan principal, and can include:

  • Application fee
  • Appraisal fee
  • Credit check fee
  • Origination and/or underwriting fees
  • Title insurance
  • Title search fee
  • Transfer tax (if applicable)

There are a number of standard closing table items for which the actual cost will vary based on the value of the home and also the partners you work with.

If you’re lean on savings, however, many lenders offer a no closing cost mortgage option, in which the closing costs are added to your loan principal or otherwise paid for in the form of a higher interest rate.

Both save you from having to bring cash to the closing upfront, but can cost you more in the long run, especially if you intend to stay in the home long-term.

Property Taxes

In addition to the cost of the home, you will also be responsible for paying property taxes. The amount of property tax that you will pay will vary depending on the state and county in which the property is located. In general, you can expect to pay between 0.25% and 0.75% of the assessed value of your home in property taxes each year.

Homeowners Insurance

Another ongoing cost of homeownership is homeowners insurance. This is a policy that protects you from financial loss in the event that your home is damaged or destroyed by a covered event, such as a fire or severe weather. Homeowners insurance also provides liability coverage, which protects you from financial losses if someone is injured on your property.

The cost of homeowners insurance will vary depending on the value of your home, the amount of coverage that you need, and the location of your home. In general, you can expect to pay between $500 and $2000 per year for homeowners insurance.

Mortgage Insurance

If you are putting less than 20% down on your home, you will also be required to pay mortgage insurance. Mortgage insurance is a policy that protects the lender in the event that you default on your loan.

The cost of mortgage insurance will vary depending on the size of your down payment, the type of loan that you choose, and the insurer. In general, you can expect to pay between $50 and $200 per month for mortgage insurance.


Another cost to consider is the cost of utilities. Depending on the size of your home, you can expect to pay between $100 and $300 per month for electricity, gas, water, and sewer.

You may also be responsible for trash collection and recycling, which will typically cost between $20 and $40 per month.

Home Maintenance

Finally, you should also budget for home maintenance and repairs. In general, you can expect to spend between one and four percent of the value of your home on annual maintenance and repairs.

For example, if your home is worth $200,000, you should budget between $2000 and $8000 per year for home maintenance and repairs.

Some home maintenance costs:

  1. HVAC System: $100-$200 per month. The HVAC system should be cleaned and tested at the start of a season-furnace in the fall and central air in the spring. Shrubbery should kept from the AC's outside condenser unit. Boilers should be cleaned and hot water heaters inspected. Homeowners should change filters regularly.
  2. Exterior water and foundation: Owners should drain hoses and turn off outside spigots before winter to avoid burst pipes. Speaking of water, snow and ice, they can all cause foundation damage. Owners should conduct an yearly check. For an unfinished basement or crawl space, that means shining a flashlight on walls, creases and floors.
  3. Appliances: $50-$100 per month. Inspect and clean dryer vents, which can cause fires. Clean the lint trap after every load of laundry. Dishwashers should be descaled every few months to prevent mineral buildup that can damage the pump. Washing machines should have hoses inspected and replaced every five years.
  4. Roof: $100-$200 per month. Shingles should be inspected for damage and replaced as needed. The flashing-the metal strips that seal the joints between the chimney and roof-should be checked for cracks.
  5. Septic system and well: $100-$200 per month. Septic tanks should be pumped every three to five years. Homeowners with wells should have the water tested annually for bacteria and nitrates. The well pump should be inspected every year and replaced as needed.

As you can see, there are a number of costs to consider when buying a home. But with careful planning and budgeting, you can make the dream of homeownership a reality. Reach out to us today to learn more about the home buying process and to get started on your search for the perfect home.

Happy house hunting!