Hidden Costs of Buying Your First Home

7 May 2025

Buying your first home is an exciting milestone! You’ve saved up for the down payment, secured a mortgage, and daydreamed about how you’ll decorate every room. But before you pop the champagne, there are some hidden costs that might catch you off guard.

Let’s break down these sneaky expenses so you can budget wisely and avoid any unpleasant surprises!

1. Closing Costs – The Price of Sealing the Deal

Picture this: You’ve found your dream home, signed the contract, and now it’s time to finalize everything. But wait—what’s this extra chunk of change you need at closing?

Closing costs typically range from 2% to 5% of the home’s purchase price and cover things like:

- Loan origination fees – What the lender charges to process your mortgage.
- Appraisal fees – Ensuring the home is worth what you’re paying.
- Title insurance – Protecting you from ownership disputes.
- Attorney fees – If required in your state.

Before you get the keys, these costs must be settled, so make sure to factor them into your budget!

2. Home Inspection Fees – Better Safe Than Sorry

A home might look perfect to the naked eye, but you never know what’s lurking beneath the surface. That’s where a home inspection comes in!

You’ll likely pay between $300 to $600 for a licensed inspector to check the house’s structure, plumbing, electrical systems, and possible pest infestations.

Skipping this step to save a few bucks? Bad idea. A home inspection can save you thousands in unexpected repairs down the road. Imagine moving in only to discover a leaking roof or faulty wiring—ouch!

3. Property Taxes – Your Annual Homeowner Dues

Owning a home means paying property taxes – and they aren’t cheap. Rates vary depending on your location, but they’re often 1% to 2% of your home’s value annually.

In some cases, lenders roll property tax payments into your mortgage, but if not, you’ll need to budget separately. Keep in mind that taxes can increase over time, so don’t just focus on what you owe today.

Hot tip? Before buying, check the historical tax rates in your area to see if increases are common!

4. Private Mortgage Insurance (PMI) – The Cost of a Low Down Payment

If you’re putting down less than 20%, lenders require private mortgage insurance (PMI) to protect themselves in case you default. PMI typically costs between 0.3% and 1.5% of your loan amount per year.

For example, on a $300,000 home with a 10% down payment, you could be looking at an extra $1,000 to $3,000 annually just for PMI.

The good news? Once you’ve built up 20% equity, you can usually cancel PMI and free yourself from this extra expense!

5. HOA Fees – When the Neighborhood Comes with a Price Tag

Love the idea of a well-maintained community with a pool, gym, or beautifully landscaped common areas? Be prepared to pay for it.

Homeowners Association (HOA) fees can range from $100 to $500 per month, depending on the community and amenities. Some luxury communities can even charge thousands annually.

Before buying, ask:
✅ Are HOA fees mandatory?
✅ What do they cover (maintenance, trash pickup, security)?
✅ Can they increase over time?

HOA fees can add up quickly, so don’t forget to factor them into your monthly budget!

6. Utility Costs – More Than Just Rent Money

When you rented, utilities were often included. Now? You’re on your own! Expect to pay for:

- Electricity and gas (heating and cooling can be pricey!)
- Water and sewage
- Internet and cable
- Garbage collection

Utility costs vary depending on the size of your home and local rates. In some areas, heating and cooling alone can add hundreds per month! Always ask the seller or utility company for past bills to get an accurate estimate before buying.

7. Home Maintenance & Repairs – Your House Won't Fix Itself

Unlike a rental, where your landlord covers repairs, you're now responsible for everything—and that can get expensive.

Experts recommend setting aside 1% to 3% of your home’s value annually for maintenance. On a $300,000 home, that’s $3,000 to $9,000 per year!

Some common (and costly) repairs include:
🔧 Roof replacement – $5,000 to $15,000
🔧 HVAC system repairs – $150 to $3,500
🔧 Plumbing issues – $150 to $4,000

Pro tip: If you’re buying an older home, expect higher maintenance costs!

8. Moving Costs – Getting There Isn’t Free

Moving into your new home comes with costs, whether you’re hiring professionals or handling it yourself.

- DIY move (truck rental, gas, packing supplies) – $200 to $1,000
- Local professional movers – $500 to $2,000
- Long-distance move – $2,000 to $10,000+

If you need furniture, appliances, or décor, those costs can skyrocket quickly. Make sure you budget for everything—not just the house itself.

9. Furniture & Appliances – Filling Your New Home

Unless you're bringing everything from your old place, you'll likely need new furniture, appliances, and décor.

Here’s a rough cost breakdown:
🛏️ Bedroom set – $1,000 to $5,000
🛋️ Living room furniture – $1,200 to $6,500
🍽️ Kitchen appliances – $3,500 to $10,000
🖼️ Home décor – $500 to $2,000

It’s easy to get carried away, but remember—you don’t need to furnish your home overnight! Start with essentials and upgrade over time.

10. Landscaping & Lawn Care – Curb Appeal Costs Cash

Want a beautiful lawn, flower beds, or a backyard oasis? Landscaping and upkeep costs add up.

- Professional landscaping – $3,000 to $15,000+
- Lawn care services – $50 to $200 per month
- Snow removal (if applicable) – $30 to $100 per snowfall

If your home has a yard, factor in the cost of maintenance (or the time you’ll spend doing it yourself!).

Final Thoughts: Budget Smart & Avoid Surprises

Buying your first home is incredibly rewarding, but hidden costs can quickly turn excitement into stress. By planning ahead and budgeting for these often-overlooked expenses, you’ll be in a much better financial position to enjoy your home without regrets.

Remember: It’s not just about affording the mortgage—it’s about affording homeownership. So, crunch those numbers and plan wisely!