Inspection, appraisal, fees -- homebuying costs add up

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 chief executive of Ross Mortgage, based in Royal Oak, Mich.

Here are other expenses home buyers incur -- and should save up for:

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.

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

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.

"Sometimes buyers can negotiate to have the sellers cover their closing costs, but it's better to negotiate the home price first and then negotiate the closing cost assistance to make sure the sellers haven't just inflated their price to cover closing costs," Jablonski says.

Ross says buyers should be careful to review their good faith estimate as soon as they receive it, so they have an idea of how much their mortgage origination fees and title insurance will cost.

Ross says the average moving cost is likely to be less than $1,000, especially if you are moving nearby.

"You need to be careful to really weigh each item against your budget," Jablonski says. "You don't have to start with a top-of-the-line lawn mower, for example. It's a great idea to do some research, and talk to people in the area where you are buying. See what they had to purchase right away, so you can budget for it."

Pithers says you may need to make deposits for utilities such as the water company or electric company, especially if you are moving from another locale.

Jablonski says it's better to have six months' mortgage payments in savings after closing.