Purchase Costs Checklist: What to Budget When Buying a Home

This U.S.-focused purchase costs checklist covers common expenses in the order you'll encounter them. Use it as a working checklist — review it before you start house hunting and revisit it before closing to confirm nothing is missing from your budget.

This article uses U.S. mortgage terminology and illustrative U.S. dollar ranges. Other countries use different taxes, settlement documents, and payment steps. Dollar ranges below are illustrative 2024–2026 planning figures, not quotes; replace them with current local estimates.

As a starting estimate, the CFPB says U.S. closing costs typically range from 2% to 5% of the purchase price, excluding the down payment. On a $350,000 home, that's about $7,000–$17,500 before credits, deposits, and optional items. Actual costs depend on the lender, loan type, property, location, and services you choose.

Remember that closing costs and cash to close are different. Cash to close can also include the down payment and adjustments, less earnest money or other deposits already paid and any seller or lender credits.

Pre-Offer Costs

These costs occur before you've found the home you want to buy. They're small individually but add up if your search takes time.

• [ ] Credit report pull — $0–$50. Many lenders pull this at no cost during pre-approval; some charge a fee.
• [ ] Pre-approval application fee — Often $0. If a lender charges one, ask what it covers and whether it is refundable.
• [ ] Optional home-search costs — Variable. Not a transaction fee, but a real cost if you're relocating or touring homes across a metro area.

Under-Contract Costs (Due Diligence Period)

Once your offer is accepted, these costs may hit before closing day. Most are paid out of pocket as they occur; some deposits, credits, or adjustments may still be reflected in the final cash-to-close calculation.

• [ ] Earnest money deposit — Often 1%–3% of the purchase price, but it varies widely by market and contract. This is not an additional cost if the purchase closes and the deposit is credited as agreed, but you need the cash immediately after acceptance. Held by an escrow holder.
• [ ] Home inspection — $300–$600 as an illustrative range for a standard single-family home. Obtain a local quote and confirm who pays.
• [ ] Specialty inspections and tests (if needed; prices vary by property and market):
  • [ ] Radon testing — $100–$200
  • [ ] Sewer/septic scope — $150–$400
  • [ ] Termite/pest inspection — $75–$150
  • [ ] Structural engineer — $300–$700
  • [ ] Roof specialist — $150–$350
  • [ ] Mold testing — $200–$600
  • [ ] Well water testing — $100–$500
• [ ] Appraisal fee — Often several hundred dollars. A lender may require an appraisal for a financed purchase; who collects the fee and when it is paid varies.
• [ ] Survey — $300–$800. Not always required (depends on state, property type, and lender), but common for rural or irregularly shaped lots.

Closing Costs and Cash to Close

Many of these costs appear on the Closing Disclosure for covered U.S. mortgage transactions, but some are paid before closing or handled as prepaids and adjustments. Follow the closing agent's verified instructions for the payment method; a wire or cashier's check is common, but not universal.

Lender Fees

• [ ] Loan origination fee — An illustrative range is 0.5%–1% of the loan amount, but some lenders charge a flat fee or no separate origination fee.
• [ ] Underwriting fee — Amount varies widely. Some lenders bundle it into the origination fee.
• [ ] Discount points (optional) — 1% of the loan amount per point. The rate reduction varies, so compare the upfront cost with the expected interest savings and your likely time in the loan.
• [ ] Rate lock extension fee (if applicable) — Varies; it may be a flat fee or a percentage of the loan amount if closing is delayed beyond the lock period.

Title and Settlement

• [ ] Title search — Often $200–$400 as an illustrative range. Covers research into public records for ownership, liens, and other issues.
• [ ] Lender's title insurance — Most mortgage lenders require it to protect their loan, but the premium varies by state, policy, loan amount, and provider.
• [ ] Owner's title insurance — Optional in many transactions. It can protect your financial interest if a covered title problem surfaces after closing; obtain a quote and review the policy.
• [ ] Settlement/closing fee — Often $500–$2,000+ depending on the state, provider, and transaction complexity.
• [ ] Courier/wire fees — Variable. Check the settlement statement and verify any wire fee before sending funds.

Government Fees

• [ ] Recording fees — $50–$250. Paid to the county for recording the deed and mortgage.
• [ ] Transfer taxes — Vary widely by state, county, and city, and the contract may allocate them differently between buyer and seller. Check the official fee schedule for the property location.

Prepaids and Initial Escrow

Prepaids are paid in advance. An initial escrow deposit is a separate amount, and not every buyer or loan uses an escrow account:

• [ ] Homeowners insurance (first year) — $1,200–$3,000+ as an illustrative planning range, depending on location, home value, and coverage. A mortgage lender may require active coverage before closing.
• [ ] Initial property-tax escrow deposit — Often 2–6 months of property taxes, but the amount depends on the lender, closing date, and local tax calendar.
• [ ] Prepaid interest — Per-diem interest from your closing date through the end of the month. Closing early in the month means more prepaid interest; closing late means less.
• [ ] Flood insurance (if applicable) — $400–$2,500/year as an illustrative range. A lender may require it for a property in a high-risk flood area; confirm with the lender and insurer.

Loan-Specific Costs

Depending on your loan type, you may owe an upfront insurance or guarantee fee. Program rules can change, so confirm current terms with your lender:

• [ ] FHA upfront mortgage insurance premium (MIP) — 1.75% of the base loan amount in most FHA forward mortgages. It can generally be financed into the loan.
• [ ] VA funding fee — 1.25%–3.3% of the loan amount for common VA-backed purchase loans, depending on down payment and first or subsequent use. Eligible borrowers may be exempt under VA rules, including some who receive service-connected disability compensation.
• [ ] USDA upfront guarantee fee — 1% of the loan amount for the FY2026 Section 502 Guaranteed Loan program; confirm the current fee with an approved lender.
• [ ] Private mortgage insurance (PMI) — If required by a conventional lender, often when the down payment is below 20%. It may be paid monthly or upfront; the amount depends on the lender, credit profile, and loan-to-value ratio.

Move-In and Immediate Post-Purchase Costs

These aren't technically "purchase" costs, but they can hit soon after ownership and catch many buyers off guard:

• [ ] Moving costs — $1,000–$5,000+ for a local move with professional movers; significantly more for long-distance.
• [ ] Lock rekeying — $100–$300. Change all exterior locks on move-in day for security.
• [ ] Utility connection/transfer fees — $0–$200. Some utilities charge setup or deposit fees.
• [ ] Immediate repairs or safety items — Variable. Anything flagged in the inspection that wasn't resolved through negotiation.
• [ ] Appliances (if not included) — $2,000–$8,000 if the home doesn't include a refrigerator, washer, dryer, or other essentials.

How to Use This Checklist

Step 1: Estimate your range. Go through each item and write down a low and high estimate for your specific market and loan type. For most U.S. mortgage applications covered by the TRID rule, the lender must provide a Loan Estimate within three business days of receiving the application — compare it against this list.

Step 2: Identify what's negotiable. Origination fees, title insurance providers, and settlement fees can vary significantly between providers. Seller or lender credits may offset some closing costs, but limits and eligibility depend on the loan program, occupancy, loan-to-value ratio, contract, and local rules.

Step 3: Set your cash reserve. After tallying all costs, keep a buffer for cost overruns, moving, repairs, and other post-move surprises. Don't drain your savings to zero at closing.

Step 4: Track as you go. Check off each item as you confirm the actual cost during your transaction. Compare the Loan Estimate with the Closing Disclosure, which most covered U.S. mortgage borrowers receive at least three business days before closing. Reconcile every line item and ask about any new or changed amount.

Common Mistakes That Inflate Purchase Costs

Not shopping for title insurance. Where permitted, compare title-service providers and the total cost of the same coverage. Who chooses the provider varies by state, contract, lender, and local practice.

Accepting the first lender's fees without comparison. Origination fees, points, and miscellaneous lender charges are among the most variable items on your Closing Disclosure. Compare multiple Loan Estimates and review Section A (origination charges) line by line.

Ignoring the timing of closing. Closing at the end of the month reduces prepaid interest (fewer days between closing and the first of next month), but check your rate-lock expiry and the closing agent's availability before choosing a date.

Forgetting post-close cash needs. Buyers who drain every dollar to close may not be able to afford urgent repairs in the first month of ownership. Keep an emergency reserve after all purchase costs are paid.