First-Time Buyer Guide: The Hidden Costs You Need to Budget For

Buying a home is an exciting milestone, but many buyers are surprised by how much more they need to budget beyond the purchase price. Understanding the hidden costs of homebuying can help you avoid financial stress and feel fully prepared for your big move.

Inspection & Appraisal Fees
Before your mortgage is approved, lenders require an appraisal—and they’re not free. Add to that a home inspection, which helps uncover issues before closing. While these costs are essential, they often catch first-time buyers off guard.

Closing Costs
Closing costs typically range from 2% to 5% of the purchase price. These expenses include lender fees, title insurance, escrow charges, and prepaid taxes. Planning ahead for these fees ensures a smoother transition on closing day.

Homeowners Insurance & Property Taxes
Your mortgage lender will require homeowners insurance, and property taxes vary widely by location. These recurring costs impact your monthly payment, so it’s important to factor them into your long-term budget.

Moving & Immediate Repairs
From hiring movers to replacing outdated appliances, initial expenses can add up quickly. Even a “move-in ready” home may need small upgrades like painting, locks, fixtures, or landscaping.

Maintenance & HOA Fees
Homeownership also comes with ongoing maintenance—roofing, plumbing, lawn care, and more. If your community has an HOA, expect monthly or annual fees.

How to Plan for These Costs
Create a homebuying budget that includes both upfront and recurring expenses. Save an extra cushion—typically 1% of the home’s value annually—for repairs and maintenance. A little planning goes a long way toward protecting your investment.