The Unexpected Costs of Buying a Home

I'm a first time home buyer. Well, almost. And I thought I was pretty prepared for the process. But let me tell you, it costs SO much. Even more than expected.  Here are some costs that I didn't know about (and that you, possibly, also don't know about):

- You have to prepay an entire year of insurance at closing. Thousands of dollars. You also then have to put a couple additional months into an escrow account in order to start socking away money for the following year's pre-payment. So in total, you are paying for 14-15 months of insurance all at once.

- You also have to prepay a couple months of property taxes for the same reason.  I think it's so you don't get a big bill all at once the following year.  You start paying it in advance instead and the mortgage company holds it for you in an escrow account.  But that means you really get kicked in the teeth at closing.

- All the inspections cost more than you think they will. Everything is so expensive. Expect, even on a cheap house, to spend $6-8K in inspection/title/misc fees for closing.  And if everything isn't perfect, you may need to have them come back for a re-inspection.

- Since you wait, wait, wait and then need to send checks ASAP to arrive the next day, or you need to wire money to arrive immediately, you end up paying money in wire transfer and overnight mail fees. I've spent probably a couple hundred dollars just on fed-ex and wire fees.

- If, like in my case, it's an investment property, everything costs more. Inspections and insurance included, in addition to a higher interest rate.

All this means I'm probably out almost 5K more than I thought I would be. Thank god I had a healthy savings account, but I'm feeling poorer right now than I have in years. I want to get someone in there renting ASAP and start building my reserves back up as quickly as possible. I just keep reminding myself it's a long term investment, not anything that will yield fruit in the next year or two.  I think buying is a great investment, but one that has a steep cost of entry, even steeper than many first time buyers expect.