Costs to buy a house in Alabama | Alabama closing costs | Alabama house buying calculator | Homeownership costs | How to save when buying a home in Alabama
The average home buyer in Alabama spends between $18,780 and $63,242 when purchasing a $215,294 home — the state median value.
Keep in mind, this is just the cost of buying a home. After you close, you'll still need to budget for all the ongoing costs of homeownership.
If you're looking for ways to cut down on the costs of buying a home, Clever Real Estate can help. We're an agent-matching service that can help you compare real estate agents in your local area. All of our agents offer local expertise to keep more money in your pocket.
Average cost to buy a house in Alabama
Expense | Amount |
|---|---|
$2,153 to $6,459 | |
$7,535 to $43,059 | |
$1,986 to $2,979 | |
$5,389 | |
$233 | |
$233 | |
$1,250 to $4,890 | |
Total | $18,780 to $63,242 |
Buyer closing costs in Alabama
While the other costs to buy a house in Alabama are pretty transparent, Alabama closing costs are a bit more nuanced. They're actually a series of smaller costs lumped together into one total. Here's a breakdown of all of the Alabama closing costs you'll likely pay when buying a home.
Closing cost | Amount |
|---|---|
Closing fee | $215 |
Recording fee | $58 |
Title service fees | $1,235 |
Origination fee | $1,076 |
Underwriting fee | $600 |
Discount points | $1,722 per point |
Lender's title insurance | $266 |
Owner's title insurance | Typically paid by seller |
Prorated property tax | Varies |
Reaccordation tax | 0.10% |
Total | $5,389 |
Keep in mind, closing costs are often negotiable. However, to win the negotiation battle, you'll need a great agent who can work out a deal with the seller. Clever can match you with a top agent in your area that can get the seller to shoulder more of the above costs.
Contact us at Clever for top agent recommendations.
Cost to buy a house in Alabama calculator
Ongoing costs of homeownership in Alabama
Unfortunately, the cost to buy a house is just the beginning. After closing, you'll officially own the home and begin paying for the ongoing costs of homeownership.
Expense | Average monthly cost |
|---|---|
Mortgage (principle and interest) | $993 |
Homeowners insurance | $152 |
Taxes | Varies but averages $73 statewide |
Maintenance | $178 |
Utilities | $439 |
Total | $1,835 |
Note: All numbers are estimates based on state averages and a median home value of $215,294 and a down payment of 20%. | |
Besides the expenses outlined above, you'll also want to consider private mortgage insurance (PMI) and homeowner's association (HOA) fees.
- If you pay less than 20% as a down payment on your house, you'll probably have to pay PMI monthly until you get to 20% equity. For the average Alabama homeowner, this is between $94 to $317 a month.
- Some neighborhoods have HOA fees for the care and maintenance of common areas. The national average is around $250 per month.
» MORE: The true cost of homeownership
Top ways to save money when buying a house in Alabama
1. Look into better financing options
Paying off debts and getting your credit in the best shape possible before applying for a loan will help you get a better interest rate, which will lower your monthly payments for the life of the loan.
You can also shop around to compare lenders so you get the lowest fees and interest rates available. It may be a good idea to enlist the help of a mortgage broker if you're not sure how to go about vetting lenders.
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Get matched with a lender who can tell you how much house you can afford. To get started, where do you plan on buying?
2. Participate in home buyer programs Alabama
Alabama has several home buyer programs that make owning a house much easier.
For instance, the Alabama Housing Finance Authority (AHFA) offers the Step Up program, which gives borrowers 4% of the sales price (up to $10,000) for their down payment costs. This program is available for home buyers making under $130,600.
Low-income buyers may also partake in Habitat for Humanity’s housing help program, which allows them to purchase affordable housing in exchange for "sweat equity" such as assisting with construction or volunteering.
» MORE: First-time home buyer programs everyone should know about
3. Partner with an expert agent
Having an expert agent on your side can ensure you win the negotiating battle with the seller.
Clever can help match you with a knowledgeable, hyper-local agent that knows the ins and outs of how to save you money on your local fees. And best of all, our service is totally free!