You spend a lot of cash when you buy a home. The down payment for your mortgage is only one expense. There are other outlays: appraisal, inspection, deposit, cash reserves and more. The costs add up.

"How much cash you'll need depends a lot on the size of your home purchase and how much you intend to finance," says Tim Ross, president and CEO of Ross Mortgage, based in Royal Oak, Mich.

Here are other expenses homebuyers incur (and have to save up for).

Earnest money deposit

Hopeful buyers need to be prepared with cash for a deposit to attach to their purchase offer. The amount of the deposit varies, depending on local custom, the amount of your down payment and size of your home purchase.

Ross says deposits can range from a flat fee of $500 to 1 percent or even up to 5 percent of the purchase price. An experienced Realtor can advise you on how much to offer.

Home inspection

"Every buyer should have a home inspection, usually within 10 to 15 days after the contract is approved," says Dyan Pithers, a sales associate with Coldwell Banker Residential Brokerage in Tampa, Fla. Costs vary; Pithers says the home inspection can set you back $325 or more. In's annual closing costs survey, pest inspections (which are separate from home inspections) averaged $119 in 2011.

If you are not on county or city water systems, a well inspection can cost $400, Pithers says.


In Bankrate's annual closing costs survey, the average appraisal cost a little more than $400 in 2011. Buyers sometimes pay for the appraisal when it takes place, and sometimes the fee is included in the closing costs paid on settlement day.

Down payment

"While some low- to moderate-income borrowers can find low down payment programs and zero down payment programs, in general, most people need at least 3.5 percent of the purchase price as a down payment on (a Federal Housing Administration) loan," says Michael Jablonski, executive vice president and retail production manager for BB&T Home Mortgage, based in Wilson, N.C.

Veterans Affairs loans, available to veterans and active-duty military families, have no down payment requirements.

"For conventional loans, a minimum down payment of 5 percent is acceptable for borrowers with excellent credit, but they will also have to pay private mortgage insurance," Ross says.

Some conventional loan and jumbo loan borrowers need to pay as much as 20 percent of the purchase price as a down payment.