How Much Money You Need to Buy a House—Beyond the Down Payment

First-time homebuyers tend to think that buying a house requires coming up with the down payment and being able to afford the monthly mortgage payment. But after closing on a home and spending some time living in it, homebuyers often find hidden costs they didn't anticipate.

For example, according to NerdWallet's 2021 Home Buyer Report, 41 percent of those who bought homes within the surveyed year said that affording home repairs and maintenance was one of their biggest financial stressors. Even the expected costs of homeownership can be more challenging than expected. In the same survey, 28 percent reported that making their monthly mortgage payment was their top financial stressor.

In a Porch survey of homebuyer regrets, almost 44 percent of respondents said they regret the loan amount they took out for their home, while 40 percent regret the price of their home. Once homeowners factor in the cost of decorating, maintaining, and fixing up a home, they may wish they had opted for a less expensive house or had saved more money before buying. To avoid buyer's remorse on perhaps the biggest purchase of your life, here are some additional costs to consider when calculating the amount of money you need to buy a house.

Closing Costs

Unless prepped by their realtor, many first-time homebuyers are completely unprepared for closing costs. "Closing costs are generally about 2 percent of the purchase price of the home," explains Yawar Charlie, director of the estates division at Aaron Kirman Group/Compass and a series regular on CNBC's Listing Impossible.

Closing costs include everything from appraisal costs and attorney fees to homeowners insurance and credit report fees to application and underwriting fees.

"This can come as a rude awakening to a lot of buyers because many people think that the purchase price is all they have to worry about, when in fact, closing costs, depending on the purchase price, can add up to tens of thousands of dollars." And Charlie adds that lenders should ensure buyers have these funds in reserve before approving the loan.

Real Estate Transfer Tax

Most people understand they have to pay property taxes but may not know they will also have to pay a real estate transfer tax. "It's also known as a conveyance tax, and it occurs whenever there is a transfer of real property," explains Tyler Forte, CEO at Felix Homes in Nashville. 

"It is imposed by state and local governments, so depending on where you live, you may have to pay a conveyance tax to the state, county, and city." It's a one-time tax and is usually a percentage of the property's sales price, but governments may handle this differently. According to Forte, in Tennessee, for example, the state charges a transfer tax of 0.37 percent.

HOA Transfer Fees

If you're purchasing a home in a subdivision with a Homeowner's Association (HOA), you may be subject to HOA transfer fees. "It's important to read the [HOA] bylaws to determine if there is an HOA transfer fee, and if so, how much it costs," Forte explains.

In most cases, Forte says the amount ranges from $300 to $500. "This is a one-time payment made to the homeowner's association whenever there is a transfer of ownership of a property." Note: These fees are different from the monthly HOA fees you will have to pay, which is another important expense to keep in mind.

Moving Costs

If you haven't moved in a while, you may discover that even transporting your furniture and other belongings to your new home could be more costly than anticipated. "Prices have steadily gone up over the years, and sometimes it can cost you several thousands of dollars to move within the same town," Charlie says.

The actual cost will depend on several factors, such as how many items you're moving, how far you're moving, and how much assistance you'll need for the move. However, according to data from Move.org, a full-service move can cost anywhere between $1,200 and $29,000. For the best rate and lowest stress experience, it's a good idea to shop around and get estimates in writing from several different moving companies before committing to one.

Start-Up Costs

As soon as you move into your new home, you'll want to change the locks. So you'll need to pay for a locksmith and the cost of new keys. "You'll have to pay out of pocket sometimes for general start-up costs when you move into a home," Charlie says. A home security system and the cost of hiring someone to install it would also fall into this category.

Utility Fees

In addition to deposits for your utilities, be prepared for any possible changes in the amount you pay for them. For example, you may be moving from an apartment complex where it cost a couple of bucks to maintain the complex's trash compactor or haul the trash away. However, you could now pay $15 or $30 a month for the garbage collection service in your new neighborhood.

Likewise, you may be paying $5 a month for the apartment complex's internet. But once you move into a home, you could be paying $30 to $50 a month—in addition to a router rental fee. Before you think of how much house you want, Elizabeth Dodson, co-founder of HomeZada, recommends considering all expenses needed to keep the home running. "You will need to remember utilities like gas, electric, water, sewer, internet or cable access, and any other type of utilities you may have, like a landline phone or a TV service," Dodson advises.

Lawn and Pool Maintenance

Depending on the type of home and its amenities or decor, you may have additional costs. If you have a yard, the grass and landscaping will need to be maintained. Either you'll need to purchase a lawnmower and pay for gas to put in it, or you'll need to pay someone to maintain the lawn and yard.

Ditto for buying a house with a pool or hot tub. Call a few local specialists to get estimates for the service, then factor that in when creating your budget. "If you do not hire for these services, you have to allocate time to perform them—and time also costs you something," Dodson notes.

General Home Maintenance

Dodson says you'll usually need to allocate between 1 to 4 percent of the home's purchase price for home maintenance. "The newer the home, the less you need to allocate for maintenance," Dodson explains. "However, annual maintenance means buying air filters, cleaning out dryer vents, cleaning windows, and so much more." And if you fail to perform regular maintenance, Dodson warns that this negligence could lead to unexpected repair costs that could be significantly more expensive later on.