Falling in love with a home is easy; budgeting for everything that comes after closing takes a bit more foresight. Many first-time and seasoned buyers focus intensely on the down payment, only to be surprised by out-of-pocket expenses that materialize during or immediately after escrow.
What to Keep on Your Radar
- Closing Costs: Typically ranging from 2% to 5% of the loan amount, these cover lender fees, title insurance, escrow services, and government recording fees.
- Property Taxes and Insurance: Lenders often require an initial cushion to fund your escrow account for upcoming property tax installments and homeowner’s insurance premiums.
- HOA Dues & Transfer Fees: If you are purchasing a property within a homeowners association, factor monthly dues and move-in fees into your ongoing monthly budget.
- Immediate Reserves: Set aside a dedicated maintenance fund for immediate move-in needs, such as window coverings, minor repairs, or professional cleaning.
