From closing costs to HOA fees, hidden fees can affect your home-buying budget. Learn what to expect and how to budget effectively for a smooth closing.

You’ve saved up for a down payment, gotten pre-approved, and found your dream home. Great! Now, you’re ready to buy your dream home, right? That’s what most people believe. However, in 2025, the price of the home is just the starting point.

Here are some key expenses you should be aware of if you’re considering buying a home today:

1. Closing costs. Most buyers have heard of closing costs, but often underestimate them. In 2025, expect to pay between 2% and 5% of the purchase price at closing. This covers lender fees, appraisals, title insurance, attorney charges, escrow setup, you name it. Ask your lender for a detailed breakdown early so you can plan accordingly.

2. Inspections and move-in expenses. Home inspections are essential but come with costs. A general inspection can range from $300 to $500, depending on factors like location, size, and age of the house. 

“There’s a lot more you need to pay for than just down payment costs. ”

3. Prepaids and escrow accounts. Lenders typically require you to prepay several months’ worth of homeowners' insurance and property taxes before closing. These prepaid expenses, which can cover six months or even up to a year, depending on your tax and insurance schedule, are collected at closing to ensure your coverage and obligations are up to date from day one.

4. HOA fees and one-time community charges. If your new home is in a homeowners association (HOA), don’t assume the monthly dues are the only costs. Many HOAs charge one-time fees at closing, such as transfer fees or initiation fees. To avoid surprises at closing, request a full breakdown of HOA financial obligations before making an offer.

5. Utility setups and hidden service deposits. It’s easy to overlook utility setup costs when you're focused on buying, but they can add up quickly. Most providers ask for one to two months’ payment in advance, so plan accordingly when budgeting.

Buying a home in 2025 is a significant milestone and investment. Hidden fees and unexpected expenses can add up quickly, and if you’re not prepared, they can throw your budget off track. Preparing to buy is more than just getting your down payment ready; being informed can help you avoid financial surprises at the closing table.

Need more guidance? Let’s connect. Feel free to call, text at (651) 998-9829, or email me at info@holzgroup.com. I’ll be happy to help.