Closing Costs Explained: How to Budget for Your First Home

February 13, 2026

Buying your first home is a major milestone - and an exciting one. Between finding the right neighborhood and finally getting your offer accepted, it’s easy to focus on the down payment and overlook another important expense: closing costs.

Understand the Basics

Closing costs typically include expenses like loan mortgage origination fees, property appraisals, home inspections, title insurance, government recoding fees, and prepaid items such as homeowner’s insurance and property taxes. Typically ranging from 2% to 6% of the home’s purchase price, these fees vary by location and other circumstances. Research what’s common in your area to better anticipate costs.

Prepare Your Budget

When planning for homeownership, be sure to include closing costs in your overall budget—not just the down payment. Setting aside funds for these expenses ahead of time can help make the process smoother and less stressful. A clear, realistic budget helps put you in a stronger position once you’re ready to close.

Negotiate With the Seller

In some cases, sellers may agree to contribute toward closing costs as part of the purchase agreement. Your Realtor, attorney or other advisor can help you negotiate these terms and determine whether requesting seller concessions makes sense based on current market conditions.

Choose a Lender with Affordable Mortgage Options

The right lender can help make a meaningful difference - especially for first-time buyers. As a community bank founded by neighbors helping neighbors, Ridgewood Savings Bank is committed to helping make homeownership more affordable and accessible.

Ridgewood is an approved SONYMA lender, offering a variety of programs designed to reduce common barriers for eligible first-time homebuyers, including lower down payments and competitive rates.

We also offer affordable mortgage loans for eligible borrowers, the Good Move Mortgage and Good Move Plus Mortgage, which provide unique benefits not available through SONYMA programs. By exploring both options with one of our experienced Mortgage Consultants, we can help you explore solutions that can fit your financial goals.

Take Advantage of Homebuyer Assistance Programs

Many first-time buyers may qualify for assistance programs that help cover down payment and closing costs. The Federal Home Loan Bank of New York (FHLBNY), New York City, and local municipalities offer programs, and our Mortgage Consultants are well-versed in identifying available government and nonprofit resources.

Ridgewood participates in the HomeFirst Program, which can provide up to $100,000 toward a down payment or closing costs for qualified first-time homebuyers in New York City. When available, Ridgewood also participates in the Homebuyer Dream Program Suite, which may offer eligible first-time buyers up to $45,000 toward the purchase of their first home.

These programs can significantly reduce upfront costs and bring homeownership within reach sooner than you may expect.

Review Your Closing Disclosure Carefully

Before closing day, you’ll receive a Closing Disclosure that outlines all final costs associated with your loan. Make sure to review it carefully, compare it to your earlier estimates, and ask questions if anything looks unfamiliar. Catching discrepancies early can help prevent delays at closing.

Work With Professionals You Trust

Buying a home doesn’t have to feel overwhelming. A knowledgeable Realtor, a residential real estate attorney and an experienced mortgage consultant can help guide you through every step of the process and explain fees, timelines, and options.

When you’re ready to buy, our mortgage team can be with you every step of the way. Connect with one of our local mortgage consultants today.

 

Ridgewood Savings Bank is an approved lender with the New York City Department of Housing Preservation & Development (HPD), which works with Neighborhood Housing Services of New York City (NHS) to offer the HomeFirst Down Payment Assistance Program.
Terms and restrictions apply to the loan programs mentioned.
This blog is for informational purposes only. Loan products and services are subject to credit approval. Products, terms, and conditions are subject to change. Member FDIC