The Hidden Costs of Buying Your First Home

Buying your first home? Learn the hidden costs beyond your down payment—from closing costs to maintenance—so you can budget with confidence.

Most first-time homebuyers focus on saving for a down payment and getting approved for a loan—but that’s only part of the financial picture.

In Wisconsin and Minnesota, the true cost of buying a home also includes seasonal expenses, property tax differences by community, and ongoing maintenance needs that can catch new buyers off guard. Understanding these expenses ahead of time can help you avoid surprises, reduce stress, and feel more confident as you move forward.

Quick Snapshot: Common Homebuying Costs

Here’s a quick look at common costs first-time buyers in Wisconsin and Minnesota should plan for:

• Closing Costs: ~2%–5% of the purchase price
• Property Taxes: ~1.5%–2% annually (varies by location)
• Home Inspection: ~$300–$700
• Maintenance: ~1%–2% of your home’s value annually

These are some of the most common hidden costs of buying a home, but your actual expenses will vary based on your location, home type, and condition.

Costs to Expect Before You Close

These are the upfront expenses you’ll typically encounter before you officially own your home.

1. Closing Costs (Typically 2%–5% of Your Loan Amount)

Closing costs are one of the biggest expenses beyond your down payment. These fees are required to finalize your mortgage and transfer ownership of the home.

They may include:

• Loan origination and underwriting fees
• Appraisal and credit report fees
• Title search and title insurance
• Attorney or escrow fees
• Prepaid homeowners insurance and property taxes

For example, on a $300,000 home, closing costs could range from roughly $6,000 to $15,000.

First-time buyer tip:

Your lender will provide a Loan Estimate early in the process so you can plan ahead. In some cases, you may be able to negotiate for the seller to cover part of these costs.

2. Home Inspection ($300–$700)

A home inspection helps you understand the true condition of the home before you buy. This gives you a clearer picture of what you’re buying and what repairs you may need to plan for.

A professional inspector can identify:

• Structural issues
• Roofing or foundation concerns
• Plumbing or electrical problems

A home inspection also gives you the opportunity to negotiate repairs or price adjustments before closing and helps you avoid unexpected surprises after you move in. In some cases, inspection findings may also influence your final decision to move forward with the purchase.

3. Moving Costs & Setup Expenses

The cost of moving and settling in is often underestimated, especially for first-time buyers transitioning from renting.

Expenses may include:

• Moving company or truck rental
• Packing supplies
• Utility deposits and connection fees

Moving costs can vary widely depending on distance, timing, and whether you hire movers or handle the move yourself.

Costs to Expect After You Move In

Once you have the keys, a new set of expenses begins as you settle into homeownership.

4. Property Taxes & Insurance

Property taxes and homeowners insurance are ongoing costs that begin at closing and continue throughout homeownership.

• Property taxes can vary significantly depending on where you live. In Wisconsin, property taxes average around 1.7% of a home’s value annually, while Minnesota rates vary by county and local tax authority. These are often included in your monthly mortgage payment.
• Homeowners insurance protects your home and belongings from unexpected events like storms, fire, or accidents. Most lenders require proof of coverage before closing, and many borrowers pay this monthly as part of their mortgage.

Because these costs are often included in your monthly mortgage payment through escrow, they can significantly impact your total monthly housing cost.

5. Repairs, Maintenance & Emergency Fund

Owning a home means you’re responsible for both ongoing maintenance and unexpected repairs.

Common expenses may include:

• Minor repairs and fixes
• HVAC servicing
• Plumbing or electrical updates

Over time, larger repairs are inevitable, such as replacing a furnace, water heater, or addressing damage caused by weather.

In Wisconsin and Minnesota, seasonal conditions can play a significant role in home maintenance. Frozen pipes, heavy snow, and storms can all lead to unexpected repairs, making it important to plan ahead.

Costs can also vary depending on the home itself. Older homes or properties with more land may require more frequent maintenance, which can increase expenses over time.

First-time buyer tip:

As a general guideline, many homeowners budget about 1%–2% of their home’s value each year for maintenance and repairs. Setting aside funds for both routine upkeep and unexpected issues can help you stay financially prepared.

6. Utilities & Everyday Living Costs

Monthly utilities are an important part of your homeownership budget.

As a homeowner, you’ll be responsible for electricity, heating, water and sewer, and trash services. In Wisconsin and Minnesota, heating costs during the winter months can significantly increase your expenses, especially in older or less energy-efficient homes.

Costs will vary depending on your home’s size, insulation, and energy source—such as natural gas, electric, or propane—as well as the efficiency of your heating system. Factoring these variables into your monthly budget can help you better prepare for seasonal fluctuations.

7. Landscaping & Seasonal Upkeep

Maintaining your home’s exterior comes with ongoing costs, which can vary depending on how much you choose to do yourself and the size of your property.

Costs may include:

• Lawn care or landscaping services
• Snow removal
• Tree trimming or seasonal cleanup

If you handle yard work on your own, you may need to purchase equipment such as a lawn mower, trimmer, shovel, or snow blower. If you prefer to hire help, lawn care services can start around $100 per month, depending on your property and services needed.

In Wisconsin and Minnesota, homeowners need to plan for both summer lawn care and winter snow removal, along with seasonal cleanup in the spring and fall. Larger lots or rural properties may require additional time, equipment, or professional services to maintain.

8. Furniture, Appliances & Personal Touches

Moving into your first home often means furnishing more space than you had before. It’s common for first-time buyers to underestimate these costs when transitioning from a smaller rental into a larger home.

You may need to budget for:

• Furniture for larger or additional spaces
• Window treatments
• Appliances
• Décor and home essentials

These expenses are often most noticeable during your first year as you settle into your new home. Focusing on the essentials first and spreading out purchases over time can help you stay on budget.

How Much Should You Save Beyond Your Down Payment?

After reviewing these potential costs, it’s helpful to have a general savings goal in mind. A good guideline is to have an additional 3%–5% of the home’s purchase price saved to cover:

• Closing costs
• Moving and setup expenses
• Initial repairs or updates

Having this extra cushion can make the transition into homeownership smoother and help you handle both expected and unexpected expenses with confidence.

Common Budgeting Mistakes First-Time Buyers Make

Even well-prepared buyers can overlook key expenses.

Watch out for these common pitfalls:

• Saving only for the down payment
• Underestimating ongoing homeownership costs
• Skipping an emergency fund
• Spending too much on immediate upgrades
• Not factoring in seasonal or regional expenses

Taking a more gradual approach and focusing on essential needs first can help you stay on track financially.

Plan Ahead & Buy with Confidence

Buying your first home is a major milestone—and being financially prepared makes all the difference.

By understanding the full cost of homeownership, you can:

• Avoid unexpected financial stress
• Make more informed decisions
• Enjoy your new home with confidence

If you’re just getting started, check out our full guide to first-time homebuyer tips to learn more about the step-by-step homebuying process.

Ready to Take the Next Step?

At Forward Bank, we’re here to help first-time homebuyers feel informed, prepared, and confident every step of the way. Connect with our mortgage team to start your homebuying journey.