Expenses First Time Home Buyers Need to Save For

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If you’re getting ready to buy your first home, you’ll need to plan for several expenses long before closing day. Some costs even show up before you start your home search. Here are five major expenses that first-time buyers should start saving for now.

Down Payment

The down payment is usually the first—and biggest—cost you’ll face. With a conventional mortgage, you can expect to put down anywhere from 3% to 20% of the purchase price. A smaller down payment often requires mortgage insurance.
If saving 20% isn’t realistic, look into low- or no-down-payment options such as FHA, USDA, or VA loans, as long as you meet their requirements.

Closing Costs

Closing costs cover the legal and processing fees needed to complete the purchase. You’ll see a breakdown of these charges in your Closing Disclosure. They often include the appraisal, title insurance, and attorney or lender fees.
Most buyers pay about 3–6% of the loan amount in closing costs, depending on the home and the complexity of the transaction.

Home Repairs and Maintenance

Once you become a homeowner, all maintenance and repairs fall on you. As a renter, you could call your landlord. As an owner, you must cover these costs yourself.
Building an emergency fund helps you handle repairs without stressing your budget or going into debt.

Furnishing Your Home

If your new space is larger than your last one, you may want to buy furniture or décor to fill it. Setting aside money ahead of time will help you avoid overspending.
Many homes also need appliances or upgrades, which can add a big expense to your move-in costs.

Homeowners’ Association (HOA) Dues

If the home is part of an HOA or POA, expect monthly dues and possible special assessments. Fees often range from $100 to $500 per month, depending on your area and the amenities. In some cities with high living costs, HOA dues can even rival a mortgage payment.

Prepare Early

The best way to manage these costs is to plan ahead. Saving before you buy helps you stay ready for both expected and unexpected expenses throughout homeownership.