First time home buyers usually budget just for two costs. One is the down payment and the other the mortgage monthly payment. But these are not the only costs when purchasing a new home. Buying the house of your dreams is full of hidden costs. They are inevitable so make sure you have enough funds put aside to cover them.

Here are seven hidden home buying expenses you need to be  prepared for:

Appraisal Fees

An appraisal fee covers the cost of having an appraiser evaluate a property. The appraiser also estimates its market value. Lenders require an appraisal before they approve a mortgage loan. It is required because the house is the underlying asset that serves as collateral for the loan. As a result without an appraisal, you cannot borrow to purchase the desired property.

According to estimates made by realtor.com you can expect to pay $300 to $400. If the property is located in a rural area, you might have to pay an additional fee. Furthermore, bigger properties or homes  above $1,000,000 will have additional fees. The cost varies based on property type, location, and square footage.

Home Inspection

A home inspection involves a professional evaluation of the condition of a property. Its purpose is to ensure that a home buyer knows the status of the house before completing the transaction. The inspection can reveal different issues. Termites, water damage, mold problems and foundation issues are a few of them. According to the U.S. Department of Housing and Urban Development, the cost for a home inspection is between $300 and $500.

Closing Costs

Closing costs consist of lender and third-party fees. They include: credit reporting and various lender fees, title and attorney fees. In addition to these they also include  a flood certification fee and an escrow account payment. Also you you will pay for points and brokerage commission as part of closing costs. Zillow estimates that these costs range from 2% to 5% of the purchase price of a property.

In addition Bankrate.com has gathered closing-cost data from up to 10 lenders from every state in US. They have calculated the average closing costs for a $200,000 mortgage with a 20% down payment. Consequently in New Jersey the average amount a home buyer would have to pay in closing costs would be $2,175.

Home Insurance

If you have a mortgage, your mortgage lender will require home owner’s insurance to cover the property. This is mainly because the house is their security for the loan. The home insurance cost varies depending on the location of the house, its value and reconstruction costs. The national average is $1,000.

 Property Tax

The property tax is a percentage of your property’s value. It varies depending on the location of your property. US citizens pay an average of $2,216 in property taxes each year. In NJ each local municipality sets its own property tax rate. As a result taxes vary by county, and even within the same county. In Hudson County, the property tax rate varies from 1.452 to 2.952 percent. While in the Essex County it will range from 1.710 to 3.638 percent. Furthermore Middlesex County features a property tax between 1,.756 to 2.753 percent. Finally in Union County it can go up to to 17.267 percent.

Homeowners Association (HOA) Fees

If you plan to move within a homeowners association you will have to pay a  HOA fee. In New Jersey HOA fees average approximately $300- $500/month.

Usually HOA fees cover the following:

• City services. include trash removal, sewage , water and electric for communal areas.
• Insurance for damage to the outside of the building and the property around it.
• Maintenance of Communal Areas covers snow removal, gardening and lawn maintenance.
• Pest control: Many HOAs schedule inspections to avoid pest infestations.
• Maintenance and repairs to the outside of the building. This usually covers roof leaks, exterior painting, driveway repairs etc.
• Operational costs for any onsite amenities such as clubhouses or spas.

Home Improvements

You should set aside some extra cash for any improvements you want to make to your new home. The cost to remodel various rooms in your house varies. It depends on the size, condition, and finishes of the room. According to Remodeling Magazine’s 2017 Cost vs. Value report the average cost to remodel a 5×7 bathroom is $18,546. While the national average to remodel a kitchen is $21,768.