The costs of buying a house keeps some people in the "renter's zone." Ownership is the so-called American dream, and many people develop a strategy for reaching this goal. They might improve their credit score and keep exact income records. However, getting a mortgage and buying a house takes more than a good credit score. Yes, this is important. But along with a good credit history and income, home buyers must have cash on-hand for mortgage related expenses. The costs of buying a house isn't cheap, which makes it difficult for some first-time buyers to jump into ownership. 

Typical Costs of Buying a House

Getting a home loan requires more than the ability to afford your monthly mortgage payments. Costs related to buying a house arise during the early stages of the buying process.

Application Fee: Your lender or broker will charge an application fee, and you must pay this fee before they review your application. Fees vary, but on average, expect to pay between $30 and $45.

Credit Report Fee: It's smart to check your own credit before applying for a home loan. But even if you pull your own credit report and credit score, your lender will not accept a copy of this report when reviewing your credit past. They will pull your report from at least one of the three credit bureaus. Credit report fees range from $30 and $40. 

Home Inspection: After a lender approves your mortgage request and the seller accepts your bid, you'll need to have the house inspected. Home inspections aren't required, but highly recommended. The inspector will check the foundation, the plumbing, the electrical system, the roof and other interior and exterior features. The inspection is key to identifying problems with the home before you close on the loan. This cost of buying a house varies and depends on the size of the property. However, expect to pay at least $250 to $300 for your home inspection. 

Home Appraisal: This cost determines the value of the property and it's important to the buying process. Lenders will only complete the loan if the sale price is lower or equal to the value of the property. The lender assigns the home appraiser and fees are due on the day of service. Expect to pay between $300 and $600 for the appraisal. 

Down Payments: One of the biggest costs of buying a house is the down payment. Nowadays, lenders require a minimum of 3 percent down on home purchases. 

Closing Costs: This cost includes the lender's or broker's loan origination fee, as well as other miscellaneous third-party expenses. Closing costs vary by state. However, they generally average between 3 and 5 percent of the mortgage loan. Fortunately, there are ways to manage the closing costs. You can include these fees in the mortgage loan balance or ask the seller to pay your closing costs. 

There is no way to get around the costs of buying a house, but with advance preparation and a careful savings plan, you can acquire enough cash to realize your dream of ownership.