15 Costs of Buying a House That Could Catch You by Surprise

When you're buying a home, your focus is probably on coming up with a down payment and making sure you can afford the price of the property.

But the cost of your transaction doesn't end with just purchasing the home alone. You'll have other transaction costs related to your mortgage and closing on the sale. And these could catch you off guard if you aren't prepared.

To make sure you aren't surprised by the expenses you'll incur, here are 15 fees you should be ready to cover.

Our credit card expert uses this card, and it could earn you $1,148 (seriously)
As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.

In most cases, lenders will require an appraisal before they will provide a mortgage.

The purpose is to determine the home's fair market value so the lender ensures the property is worth enough to guarantee the mortgage.

An appraisal can cost around $300 to $450 or more depending on the complexity of appraising your property. You typically won't get to choose the appraiser -- the bank tells you who to work with.

A survey is necessary in most home sales to identify where the boundary lines are for the property. This can also cost several hundred dollars, with larger properties typically more expensive to survey.

An inspection of the home is critical to protect your investment -- and mortgage lenders usually require it.

You may be surprised to find that paying just one inspector isn't sufficient to find out all about the home.

You may need a special pest inspector if there's evidence of wood-destroying organisms, a pool inspector if the property has a swimming pool, and someone to inspect the well and septic system if the property doesn't have public water and sewer.

Each inspector you work with can charge a few hundred dollars depending on the scope of the work they're performing.

Many mortgage lenders charge various fees for originating your loan.

There are different names for the fees you'll pay up front to your lender. You may be charged an underwriting fee, an application fee, or an origination fee.

Origination fees usually cost around 0.5% to 1% of the amount of your loan, so can be quite costly and can come as a huge shock if you don't realize you have to pay a lender to do business with you.

ALSO READ: What Is a Mortgage Origination Fee?

Depending when you purchase your home and how your state's rules work, the current homeowner may have already paid the property taxes for the year.

If that's the case, you may have to pay them back at closing for the taxes that will accrue during the portion of the year you'll be living in the home.

Our credit card expert uses this card, and it could earn you $1,148 (seriously)
As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.

Interest will accrue in between the time you close on your mortgage and the time you make your first payment.

Generally, you need to prepay this interest on the day you close on your house. Depending how much you're borrowing and what your rate is, this can be a big up-front expense.

If you are moving into a home in a neighborhood with a homeowners association (HOA), you may have to pay an up-front fee to that association (depending on the neighborhood's rules).

If the previous owners paid the HOA dues for the year and you'll be living in the house for part of that year, you'll probably also have to pay them back for a portion of those fees.

This is another cost you'll incur at closing, and can be expensive if the HOA dues are high.

ALSO READ: What Is a Homeowners Association?

Title insurance companies play an important role in the home-buying process.

They will check the title of the property to make sure that you're getting a clean transfer of ownership with no claims on the property that you weren't expecting.

You also need to protect yourself in case a problem with the title comes up that didn't show up in the title search. Lenders will require this, and it's also just a good idea. That means you need to purchase title insurance to get the necessary protection.

The title search and insurance policy you'll need to buy can add up to cost several thousand dollars, although prices vary depending where you live.

Some home-related expenses, such as property taxes and home insurance, are paid once a year. But lenders usually want to make sure you're saving money throughout the year to pay them.

As a result, they commonly require you to pay a set amount each month for insurance and property taxes as part of your mortgage payment. The money that you pay each month is put into an escrow account, and lenders then use it to pay the annual bills.

In many cases, lenders will require you to make an initial deposit into your escrow account that is large enough to cover several months of property tax and insurance expenses. This can be a surprising cost, and it may require coming up with several thousand dollars at closing.

If you don't put at least 20% down on your home, lenders will require mortgage insurance.

Usually, you pay mortgage insurance in a monthly payment over time. But sometimes there's an up-front premium. Federal Housing Administration (FHA) lenders require you to pay an up-front insurance fee, and some private lenders may as well.

If you were expecting to pay monthly for insurance to protect your lender, you may be surprised to be asked to pay a cost for coverage when you close on your home.

Our credit card expert uses this card, and it could earn you $1,148 (seriously)
As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.

Most homeowners insurance policies exclude flood damage. It's important you know if your property is in a flood zone so you can get the protection you need.

If you could potentially be in one, you'll likely have to pay for an elevation certificate and/or flood certification to determine your flood zone status.

This can cost a few hundred dollars and come as a surprise, especially if you don't live near a large open body of water but there's a small creek or pond nearby.

You'll have to get your electricity, water, and sewer services turned on when you buy a home. You may also need to have internet and cable or satellite TV installed.

You may be surprised to discover that your utility company requires you to put down a deposit in order to get these services operational. These deposits can add up to a few hundred dollars as well.

Many municipal areas charge you to transfer ownership from one person to another. These costs can be surprisingly high, sometimes adding up to several thousand dollars.

There's lots of paperwork involved in closing on a home and mortgage and transferring ownership.

Still, you may be surprised to discover that you're charged a fee to prepare documents for your closing day. While this fee isn't as large as some of the others on this list, you'll still need to be ready for it.

In some states, you are required to have an attorney handle your real estate closing. In others, title companies or escrow companies are able to take care of this task. You'll have to pay a fee to whatever professional arranges your closing.

If you aren't required to have an attorney, you may still want one to review your sales contract and make sure everything is in order. Most attorneys charge hourly, and their fees can be upward of $100 per hour.

Our credit card expert uses this card, and it could earn you $1,148 (seriously)
As long as you pay them off each month, credit cards are a no-brainer for savvy Americans. They protect against fraud far better than debit cards, help raise your credit score, and can put hundreds (or thousands!) of dollars in rewards back in your pocket each year.

But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

That’s why our expert – who has reviewed hundreds of cards – signed up for this one personally. Click here to get free access to our expert’s top pick.

As you can see, there are lots of expenses when you buy a home. And the costs don't stop once you move in, either, as there will be ongoing maintenance and repair expenses.

That's why it's so important to make sure you have all of your financial ducks in a row, including money saved for closing fees and an emergency fund for after you move in.

By preparing for all the costs you'll incur, you can make purchasing your home a stress-free process.