5 Overlooked Costs First-Time Homebuyers Should Plan For

Buying your first home is one of the most exciting milestones in life. But while many first-time buyers focus on the down payment and monthly mortgage, there are several hidden costs of buying a home that can catch you by surprise. Planning for these expenses upfront can help you stay financially secure and avoid buyer’s remorse.

According to the National Association of Realtors (NAR), nearly 36% of first-time buyers said unexpected costs were their biggest financial challenge after purchasing a home. Let’s break down five often-overlooked costs every first-time homebuyer should prepare for.

1. Closing Costs – 2% to 5% of the Purchase Price

Your down payment isn’t the only large check you’ll write at the closing table. Closing costs typically range from 2% to 5% of the home’s purchase price. On a $300,000 home, that’s anywhere between $6,000 and $15,000.

These costs may include:

• Loan origination fees

• Title insurance

• Attorney fees

• Appraisal and inspection fees

• Escrow fees

Tip: Ask your lender for a Loan Estimate early in the process. This document breaks down expected closing costs so you’re not caught off guard.

2. Moving Expenses – $1,500 on Average

Moving into your new home isn’t free. Whether you’re renting a truck or hiring professional movers, the costs add up quickly. According to Forbes, the average local move costs around $1,500, while long-distance moves can exceed $4,000.

Beyond moving trucks, don’t forget expenses like:

• Packing supplies (boxes, tape, bubble wrap)

• Furniture delivery

• Storage units, if needed

3. Home Maintenance & Repairs – 1% of Home Value Annually

A rule of thumb many homeowners use: budget 1% of the home’s purchase price each year for maintenance. That means if you buy a $350,000 home, you should expect to spend at least $3,500 annually on upkeep.

Common early repairs for first-time buyers include:

• Replacing old appliances

• Fixing plumbing or electrical issues

• Roof patching or gutter repairs

• Lawn and landscaping upkeep

Stat: A HomeAdvisor survey found that homeowners spend an average of $3,000–$5,000 annually on maintenance and unexpected repairs.

4. Property Taxes & Homeowners Insurance

While your lender may include property taxes and insurance in your monthly mortgage escrow, the initial upfront payments can surprise buyers.

• Property taxes vary widely by location, but the U.S. average is 1.1% of the home’s assessed value per year (Tax Foundation).

• Homeowners insurance averages about $1,428 annually according to Bankrate.

Pro tip: Shop around for insurance and ask your lender or real estate agent about local tax rates before finalizing your budget.

5. HOA Fees & Utilities

If your dream home is in a condo or planned community, be prepared for Homeowners Association (HOA) fees. These can range from $200 to $600 per month depending on the amenities provided (pool, gym, landscaping, security, etc.).

Additionally, many first-time buyers underestimate utility costs, especially when moving from a smaller rental to a larger home. Heating, cooling, water, and internet bills can easily add a few hundred dollars to your monthly expenses.

Final Thoughts

Buying your first home is exciting, but being prepared for these hidden costs will set you up for long-term success. Instead of focusing only on the down payment and mortgage, factor in closing costs, moving expenses, maintenance, insurance, and ongoing community fees. A well-prepared budget will give you peace of mind and allow you to truly enjoy your new home.