Home Buying Costs That are Often Overlooked

Buying a home is a considerable investment, but one that pays off in the long run. Although we believe everyone should consider purchasing a home instead of renting, many overlooked costs go into a home purchase that should be addressed. Here are some of the hidden or overlooked expenses that go into your new home purchase.

Loan Origination Fee

One of the first unexpected costs when buying a home is the loan origination fee. When you take out a new mortgage loan, you pay the lender a fee for doing the work to set it up. This fee can be quite large and is usually required upfront at the very beginning of the loan process. The exact amount of your loan origination fee can vary depending on the total cost of your loan and which lender you use, but most fees are between .5 percent and 1 percent of the total value of the loan. So if you’re taking out a $250,000 loan, you can expect to pay between $1250 and $2500 for your loan origination fee.

Real Estate Agent Fee

If you decide to use a real estate agent for the home buying process, you’ll need to pay their fee. The more you pay for a home, the higher their fee will be. However, sometimes the seller of the house picks up the fee for both their agent and yours. Be sure to clarify this in the beginning of the home buying process.


When you buy a new home, you’ll also be buying many different insurance policies. Homeowner’s insurance, title insurance and flood insurance are just a few of the policies you’ll need. None of these insurance policies are very expensive, but they do add up, so be sure to include them in your budget.

For questions on home buying expenses, be sure to contact your real estate lawyer.