The down payment is just the beginning. There are several costs that catch first-time buyers off guard. Here is a clear-eyed look at what home ownership really costs beyond the mortgage payment.
Closing Costs
Closing costs typically run 2% to 5% of the purchase price. On a $250,000 home, that is $5,000 to $12,500. These costs include lender fees, title insurance, appraisal fees, recording fees, prepaid taxes and insurance, and more. I always make sure my buyers understand these costs upfront so there are no surprises at the closing table.
Property Taxes
Texas has no state income tax, but property taxes are among the highest in the nation. In North Texas, tax rates vary by county and school district, but you can generally expect to pay between 1.8% and 2.5% of your home's assessed value annually. On a $300,000 home, that could mean $5,400 to $7,500 per year - or $450 to $625 per month added to your housing costs.
Homeowner's Insurance
Texas homeowner's insurance premiums tend to be higher than the national average due to weather risks. Expect to pay between $2,000 and $4,000 per year depending on the home's age, location, and coverage level. Flood insurance is a separate policy if you are in a flood zone - and even if you are not, it is worth considering.
HOA Fees
Many neighborhoods in North Texas have Homeowners Associations. HOA fees can range from $20 to $200+ per month and typically cover common area maintenance, community amenities, and sometimes water or trash service. Make sure you understand what the HOA covers and any rules or restrictions before you buy.
Maintenance and Repairs
A common rule of thumb is to budget 1% of your home's value per year for maintenance. On a $300,000 home, that is $3,000 per year or about $250 per month. This covers HVAC servicing, roof repairs, plumbing issues, appliance replacement, and the inevitable surprise expenses. Homes do not maintain themselves - planning for this makes homeownership less stressful.
The Real Monthly Cost
Let me paint the full picture. If you buy a $300,000 home with 10% down ($30,000), your monthly costs might look like this: principal and interest (~$1,795), property taxes (~$500), insurance (~$250), HOA (~$75), and maintenance reserve (~$250). That is roughly $2,870 per month - significantly more than just the mortgage payment.
Knowing these numbers ahead of time is not meant to discourage you. It is meant to empower you. When you understand the full picture, you make better decisions and feel more confident in your investment.
I am here to help you understand every number. What is important to you? Let us find a home that fits your life and your budget.
