She saved $20,000 for a down payment. She found a home she loved at $350,000. She thought she was ready.
Then the closing disclosure arrived, and there was another $14,000 in costs she did not see coming. Title insurance. Prepaid taxes. Escrow deposits. An appraisal fee. Origination points. It was like a second down payment hiding behind the first one.
She closed on the house (we helped her find a lender credit that covered some of those costs), but the shock almost derailed the whole deal. And her story is not unusual.
Here is every cost you should actually budget for when buying a home in 2026, so nothing catches you off guard.
Closing Costs: The Big One Nobody Fully Explains
Closing costs typically run 2% to 5% of the purchase price. On a $350,000 home, that is $7,000 to $17,500 on top of your down payment.
According to the Consumer Financial Protection Bureau, the average buyer pays roughly 3% to 4% in closing costs, though this varies by state and loan type. Here is what that actually includes:
Lender Fees
Origination fee: $1,750 to $3,500 (0.5%-1% of loan amount). This is the lender's fee for processing your loan. Not all lenders charge this, and the amount varies. Shopping multiple lenders matters here.
Discount points: $0 to $3,500+ (optional, 0%-1%+ of loan amount). Paying points buys down your rate. One point equals 1% of your loan amount and typically reduces your rate by about 0.25%. Whether this makes sense depends on how long you plan to stay.
Underwriting fee: $300 to $900. Some lenders lump this into the origination fee, others charge it separately.
Credit report fee: $30 to $50. Covers pulling your credit from all three bureaus.
Third-Party Fees
Appraisal: $400 to $700. Required by the lender to confirm the home's value supports the loan amount. According to Fannie Mae guidelines, an appraisal is required on most conventional mortgage transactions.
Home inspection: $300 to $500. Technically optional (but you should always get one). Covers a general inspection of the home's condition, structure, and major systems.
Title search: $200 to $400. A title company researches public records to make sure nobody else has a claim on the property.
Title insurance (lender's policy): $500 to $1,500. Protects the lender if a title issue surfaces after closing. Required on virtually all mortgages.
Title insurance (owner's policy): $500 to $1,500. Protects you. Optional but strongly recommended. Often purchased at the same time as the lender's policy at a discounted rate.
Settlement/escrow fee: $500 to $1,500. The title company or attorney's fee for handling the closing.
Survey: $300 to $600. Not required in all states, but verifies property boundaries.
Government Fees
Recording fees: $100 to $250. Your county charges this to officially record the deed and mortgage.
Transfer taxes: Varies widely. Some states charge 0.1% to 2%+ of the sale price. Some counties add their own tax on top. In some states, this is zero. Check your local rates.
Prepaid and Escrow Costs
Prepaid interest: $25 to $75 per day until your first payment. If you close on the 15th, you are prepaying about 15 days of interest.
Homeowners insurance (first year): $1,200 to $2,500. Typically due in full before closing.
Property tax escrow: 2 to 6 months prepaid, depending on when taxes are due. On a $350,000 home with $4,200 annual taxes, that is $700 to $2,100.
Insurance escrow: 2 to 3 months prepaid into the escrow account.
Real Dollar Example: Closing Costs on a $350,000 Home
With a 10% down payment of $35,000, your total cash needed at closing could be $42,300 to $51,425.
Use our payment calculator to estimate your full monthly costs including escrow.
Ongoing Costs Most Buyers Forget
The expenses do not stop at closing. Here are the recurring costs that catch new homeowners off guard:
Private Mortgage Insurance (PMI)
What it is: If you put less than 20% down on a conventional loan, you will pay PMI. This protects the lender, not you, in case you default.
What it costs: Typically 0.5% to 1.5% of the loan amount annually. On a $315,000 loan (10% down on $350,000), PMI could run $130 to $395 per month. According to Freddie Mac, PMI costs vary based on credit score, down payment, and loan type.
When it goes away: For conventional loans, you can request PMI removal at 20% equity and it automatically drops at 22%. FHA loans require mortgage insurance for the life of the loan unless you refinance into a conventional loan.
HOA Fees
What they cover: Landscaping, common areas, community amenities, sometimes exterior maintenance or master insurance policies.
What they cost: $100 to $400+ per month for condos and planned communities. Some luxury or urban HOAs exceed $800 per month.
What to watch for: Read the HOA budget and reserve study before buying. A well-funded HOA is fine. A poorly funded one might hit you with special assessments of $5,000 or more when the roof needs replacing.
Maintenance and Repairs
The general rule: Budget 1% to 2% of your home's value per year for maintenance. On a $350,000 home, that is $3,500 to $7,000 annually, or roughly $290 to $585 per month.
This covers things like HVAC servicing, plumbing repairs, appliance replacement, roof upkeep, and the dozens of small things that break in any home. According to the National Association of Realtors, deferred maintenance is one of the top reasons homeowners face unexpected large expenses.
Property Taxes
What to budget: The national median effective property tax rate is roughly 1.1%, according to the U.S. Census Bureau. On a $350,000 home, that is about $3,850 per year or $320 per month. But rates vary dramatically by state: from under 0.5% in Hawaii to over 2% in New Jersey and Illinois.
What to watch for: Your assessed value can increase over time, and tax rates can change. Budget for annual increases of 2% to 5%.
Homeowners Insurance
What to budget: $1,200 to $2,500+ per year for a standard policy, depending on location, coverage, and deductible. Homes in areas prone to flooding, hurricanes, or wildfires often require additional policies that can double or triple the cost.
Utilities
Renters sometimes have utilities included. Homeowners always pay their own. Budget $200 to $400 per month for gas, electric, water, sewer, and trash, depending on your home's size and location.
Moving Costs
This one gets overlooked in every budget. A local move typically costs $800 to $2,500 for professional movers. A long-distance move can run $3,000 to $10,000 or more.
Then there are the immediate purchases: new locks ($100-$200), window coverings ($500-$2,000), basic tools and supplies ($200-$500), and whatever the previous owners took with them that you assumed was staying.
The Complete First-Year Budget: $350,000 Home
Plus your ongoing monthly costs: mortgage, taxes, insurance, PMI (if applicable), HOA (if applicable), utilities, and maintenance reserves.
How to Reduce These Costs
Negotiate seller concessions. In many markets, sellers can contribute 2% to 6% toward your closing costs. This is especially common when inventory is high. Your loan officer and real estate agent can strategize on this together.
Shop your lender. According to the CFPB, borrowers who compare offers from multiple lenders save an average of $1,500 or more over the life of the loan. At CMS Mortgage, we do this comparison for you across 50+ lenders.
Ask about lender credits. Accepting a slightly higher rate in exchange for a lender credit can cover thousands in closing costs. This makes sense if you plan to refinance in a few years.
Skip the discount points. Unless you are staying for 7+ years, paying points to buy down your rate often does not break even.
Choose the right loan program. First-time buyers may qualify for down payment assistance, FHA loans with 3.5% down, or VA loans with 0% down. The right program can save you tens of thousands upfront.
Our team at CMS Mortgage, a top 50 national brokerage with 20+ years of experience, walks every buyer through these costs before they start house hunting. No sticker shock. No surprises.
Frequently Asked Questions
How much are closing costs on a $350,000 house?
Closing costs on a $350,000 home typically range from $7,000 to $17,500, or roughly 2% to 5% of the purchase price. The exact amount depends on your location, loan type, and lender fees. This is in addition to your down payment.
What is the most expensive hidden cost of buying a home?
For most buyers, the combination of prepaid escrow items (property taxes and insurance reserves) and title insurance represents the largest unexpected expense. Together, these can add $3,000 to $6,000 to your closing costs. Ongoing, private mortgage insurance is often the biggest surprise monthly expense, adding $130 to $395 per month if you put less than 20% down.
Can I roll closing costs into my mortgage?
In some cases, yes. VA and USDA loans allow certain closing costs to be financed into the loan. For conventional and FHA loans, you cannot roll closing costs into the loan, but you can negotiate seller concessions or lender credits to offset them. The tradeoff is a slightly higher loan amount or interest rate.
How much should I save before buying a house?
A safe target is your down payment plus 5% of the purchase price for closing and move-in costs, plus 3 to 6 months of total housing payments as a reserve. For a $350,000 home with 10% down, that means roughly $55,000 to $65,000 in total savings to buy comfortably without financial stress.
Do first-time homebuyers pay closing costs?
Yes. First-time buyers pay the same closing costs as repeat buyers. However, first-time buyers often have access to down payment assistance programs, seller concession strategies, and loan programs (like FHA) that can reduce the upfront cash needed. Ask your loan officer about options in your state.
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This content is for educational purposes and is not financial advice. Costs vary by location, loan type, and market conditions. Contact a licensed loan officer at CMS Mortgage to get a personalized cost estimate for your home purchase.
Want to know exactly what your home purchase will cost? Start your personalized estimate here.