Buying a home is one of the most exciting milestones in life, but for many first-time buyers in Utah, the excitement can be dampened by the fear of "hidden" costs. We all know about the sticker price and the down payment, but what else goes into the final tally?

I’m Lori Collins, a Realtor here in Springville, Utah, and I believe that transparency is the key to a stress-free home-buying experience. To help you plan your budget with confidence, let’s pull back the curtain on the real, predictable costs of buying a home in the Beehive State.

1. The Down Payment: More Flexible Than You Think

The down payment is often the biggest hurdle for buyers, but there’s a common misconception that you must have 20% down. While a 20% down payment eliminates the need for Private Mortgage Insurance (PMI), it isn't the only option.

Depending on your loan type, your down payment could range from 0% to 20%.

• VA and USDA Loans: These often allow for 0% down for qualifying veterans or those buying in designated rural areas.

• FHA Loans: Popular with first-time buyers, these typically require as little as 3.5% down.

• Conventional Loans: Many buyers are surprised to learn they can often secure a conventional loan with just 3% or 5% down.

2. Closing Costs: The Final Step

Closing costs are the fees associated with processing and finalizing your real estate transaction. In Utah, you can generally expect these to range between 2% and 3% of the purchase price. These costs cover several essential services:

• Lender Fees: This includes the cost of processing your loan, credit report fees, and underwriting.

• Title Fees: Title insurance protects you and the lender from any future legal disputes over property ownership.

• Escrow Costs: These are the fees paid to the third party that handles the exchange of money and documents during the sale.

3. Inspection Costs: Protecting Your Investment

Before you sign on the dotted line, you want to know exactly what you’re buying. While an inspection is an out-of-pocket expense, it can save you thousands in the long run. In Utah, we recommend three specific types:

• General Home Inspection: A top-to-bottom check of the home's structure and systems.

• Radon Testing: Because of Utah's geology, radon (a colorless, odorless gas) is common. Testing is a simple way to ensure your home's air quality is safe.

• Sewer Scope: This involves a camera being sent down the main sewer line to check for cracks, roots, or blockages—especially important in older Utah neighborhoods.

4. Appraisal Fees: Confirming the Value

Your lender will require a professional appraisal to confirm that the home is worth the amount you’re borrowing. This is a standard buyer expense and ensures you aren't overpaying for the property.

5. Earnest Money: Showing You’re Serious

Earnest money is a "good faith" deposit you make when you submit an offer. It’s held in an escrow account and—provided everything goes smoothly—it is applied toward your down payment or closing costs at the end of the deal. It’s a way to show the seller that you are committed to the purchase.

Pro-Tip: The Power of Seller Concessions

One of the best ways to manage these costs is through seller concessions. In certain market conditions—especially for homes that have been on the market a bit longer—sellers may agree to pay a portion of your closing costs. This can significantly lower the amount of cash you need to bring to the closing table.

Let’s Get Your Personalized Estimate

Every home and every buyer is unique. While these averages provide a great starting point, the best way to prepare is with a personalized plan.

Whether you’re looking in Springville or anywhere else in Utah, I’m here to guide you through every step of the process—from the first showing to the final signature.

Using a $450,000 price for your home

Buying a home for $450,000 in Utah is a significant and exciting investment. However, looking at that sticker price is only the first step. To ensure you aren't caught off guard at the closing table, you need a clear breakdown of where your money actually goes.

Below is a detailed analysis of the real-world costs for a $450,000 home purchase in today's Utah market.

1. The Down Payment: Your Largest Upfront Cost

While the "20% rule" is a common myth, the amount you put down significantly impacts your monthly payment and whether you'll pay Private Mortgage Insurance (PMI).

• 3.5% (FHA Loan): $15,750

• 5% (Conventional): $22,500

• 20% (Traditional): $90,000

Note: If you are a Veteran or buying in a qualifying rural area (like parts of Eagle Mountain or more rural spots in Utah County), you may qualify for a 0% down program.

2. Closing Costs: The "Hidden" 2-3%

Closing costs are the administrative and legal fees required to finalize the sale. For a $450,000 home, expect to pay between $9,000 and $13,500. This generally includes:

• Loan Origination Fees: Usually 0.5% to 1% of the loan amount ($2,250 – $4,500).

• Title Insurance & Escrow Fees: Essential for protecting your ownership rights.

• Prepaid Items: Lenders often require you to pay the first year of homeowners insurance and a few months of property taxes upfront.

3. Inspection Costs: The Best Money You'll Spend

In Utah, a standard home inspection is just the baseline. Because of our local geography and aging infrastructure in some areas, I always recommend three key tests:

• General Home Inspection: ~$400 – $500

• Radon Testing: ~$150 – $200 (Utah has high radon levels; this is a health essential).

• Sewer Scope: ~$150 – $250 (Crucial for identifying tree roots or cracked pipes before they become a $10,000 disaster).

Total Inspection Budget: Approximately $700 – $950.

4. Appraisal Fee

Your lender will hire an independent appraiser to ensure the home is worth the $450,000 you're paying.

• Estimated Cost: $450 – $700.

  (This is typically paid out-of-pocket at the time the appraisal is ordered.)

5. Earnest Money: Your "Skin in the Game"

When you make an offer, you'll need to provide an earnest money deposit to show the seller you’re serious. In Utah, this is typically 1% of the purchase price.

• Amount: $4,500.

• The Good News: This isn't an "extra" fee. This money is held in escrow and credited back to you at closing to cover your down payment or closing costs.

How to Lower These Costs

The most effective way to reduce your out-of-pocket expense is through Seller Concessions. Depending on the home and how long it’s been on the market, we can often negotiate for the seller to pay a portion (or all) of your closing costs. On a $450,000 home, a 2% seller concession could save you $9,000 at the closing table!

Summary Table: $450,000 Utah Home Purchase