7 Home Expenses That Surprise First-Time Buyers the Most

First-time buyers often focus on the down payment and monthly mortgage payment. But some overlooked costs can add thousands of dollars upfront, while others become regular monthly bills.

Price out these seven expenses before deciding how much home you can afford.

The down payment isn't the only major upfront expense.

Closing costs are typically 2% to 5% of the purchase price, according to Freddie Mac. On a $400,000 home, that's another $8,000 to $20,000 for expenses such as lender fees, an appraisal, title services, government charges and prepaid taxes or insurance.

Use that range for early planning, then check the closing-cost estimate on your Loan Estimate against the final charges on your Closing Disclosure.

The property tax amount shown on a listing may be based on what the seller paid last year. After the sale, the home may be taxed based on its new sale price, and the seller's tax breaks may go away. You could wind up paying more.

"Buyers often don't realize that current property tax bills or an initial escrow estimate may rely on the previous year's bill, which can reflect the seller's exemptions or assessed value," said Colton Pace, co-founder and CEO of property tax company Ownwell.

Ownwell surveyed 2,500 homeowners in March 2026 and found that 64% were surprised or shocked by their latest property tax bill. About 76% said their taxes had exceeded what they budgeted.

Before making an offer, ask the local tax office or your real estate agent how the sale could affect the property tax bill. When you receive your Loan Estimate, check the property tax amount and ask your lender how it was calculated.

"The one that catches people off guard most often is homeowners insurance," said Ashley Harris, director of homebuyer education at Neighbors Bank .

The first insurance quote may be higher than you expected, and the insurance company can charge more when your coverage is renewed for another year. If insurance is included in your mortgage payment, that payment can rise too, even with a fixed rate.

Get an insurance quote for the address of the home you want to buy. If the property has flood risk, price a separate flood policy because standard homeowners insurance generally doesn't cover flooding.

Moving from an apartment to a house doesn't just mean more space to heat and cool.

"Moving from an apartment into a larger single-family home often means higher electricity and water bills," said Nick Good, operator of North Texas real estate company The Good Home Team .