Next month marks three years since we moved into our current home.

This is actually the third house we’ve purchased. That’s crazy to me! Throughout each of our home-buying journeys — through buying, moving in, and getting settled, we have experienced SO many hidden costs that come along with home buying. So much so that I WISH someone would have warned me about them beforehand so that I could’ve been better prepared financially.

That’s what today’s episode is all about! I’m giving you 9 hidden costs many people don’t factor into their budget when buying a home. Since buying a home is a major decision, it’s important to consider ALL the facts before you sign on that dotted line.

So here we go, let’s dive into nine hidden costs that you need to be sure you know about before you buy a home.

Property Taxes

As a homeowner, you will have to pay annual property taxes, and each year they’re going to change. They’re going to go up or down depending on the value of your property.

When we bought our first house, I knew nothing about property taxes. And we actually bought a home that was a new build. So our property taxes were really low the first year because our property was taxed on undeveloped land. But the next year, our property taxes took into consideration the actual value of the house on the property. Meaning, our property taxes jumped way up (by hundreds of dollars a month) which was a major shock to me!

So you’re going to want to include buffer in your budget to account for property taxes if you’re looking to buy a home.

AND, if the previous owner has already paid the property taxes, you might have to actually reimburse them before you take ownership of the house! Yeah, that’s what we had to do with the current house we’re in.

Another thing to realize is that as the market changes and as homes increase in value, it’s going to increase your property taxes as well. Typically, property taxes are based off of the county that you live in. There are certain counties where the property taxes are going to be more expensive than others, so you’re going to want to take that into consideration when creating your budget before deciding to buy.

As you are searching for your next home, ask your realtor about property taxes get a really good idea of what they are going to be because. Because it’s going to go into your monthly costs for owning the home.

Home Insurance

The second hidden costs that you need to be sure that you consider is home insurance. As a homeowner, you’re going to want to ensure that you have good home insurance to cover anything that could happen, even unlikely or rare scenarios.

Most home insurance is going to cover expenses like a fire, flood, sewer backup, overland water protection, any personal liability. But you want to make sure that you have that home insurance in place.

Here’s a little tip if you’re looking to purchase your first home: first time homebuyers might get a special rate or incentive from different insurance brokers, so be sure you keep an eye out for that!

Our family has standard home insurance and we shop around often, about every few years. This year, we are actually changing our home insurance plans because our rate with a certain company went up so much that we’re switching to a different home insurance company, and it’s going to lower our rate by 1000s of dollars this year! All because we shopped around and chose a different company that offered a lower rate. It’s going to have the same amount of coverage and the same deductible. Everything’s the same. It’s just going with someone that’s offering us a cheaper rate.

We also have chosen to pay for flood insurance. My husband and I live in the Houston area, which is in notorious for getting hit with hurricanes. We also have a lot of flash flooding in our area due to the type of soil that we have – water just doesn’t drain into the soil. When we have big storms, the area floods very, very quickly. And then with Hurricane Harvey, that happened several years ago, areas flooded that had never flooded before. So while our home, which has been around for about 27 years, has never once flooded, many homes just half a mile down the road have. Thankfully we are up a little bit higher, but my husband and I do pay $600 in yearly flood insurance just to be safe.

Closing Costs

The third cost you’re going to want to consider when buying a home is closing costs. So between the lender and the seller, any closing costs must be paid for you to be able to actually walk away with the keys to your home. They can include things such as property appraisal, title, insurance, any types of inspections, and they honestly vary depending on where you live and the type of loan you have. So we’re not going to dive into what goes into your closing costs, because it honestly depends. But a good estimate is that it’s going to range anywhere from 3% to 6% of the total value of your loan. So sometimes if you’re lucky, the seller may agree to cover some or all of the closing costs, and what is known as the seller’s concessions. So hopefully that happens, but it doesn’t happen all of the time. Just know that you’re going to have closing costs when you buy a house.

HOA Dues

The fourth hidden cost is actually your homeowners association dues. Now, sometimes you get lucky and you find an area that you can move into that does not have a homeowner’s association. But most neighborhoods, whether you’re in a house, condo or a townhouse, do have one. So it’s likely going to have to pay these HOA dues. HOA dues cover different costs like maintenance, common areas like pools or outdoor spaces that everyone shares, things like mowing the grass and doing the landscaping. And depending on how big your neighborhood is, or how elaborate it is, the fees can range.

So our first two homes were in smaller neighborhoods that had one neighborhood pool and a couple of entrances to the neighborhood. It was very simple. And we had to pay anywhere between $200 to $250 a year every January for those HOA dues.

The house we moved into now is a massive community and has more than one pool. I think we have 11 or 12 pools that we can use and lots of common spaces including parks and walking trails. So naturally our HOA dues are a lot more expensive. We pay over $1,100 every single year to our homeowners association. I know that might sound crazy, because some people are in condos and they’re paying $400- $500 a month in HOA dues. But for us in Texas, it’s pretty high.

Here’s an honest story: When we moved into this house in July of 2019, we had to reimburse the previous owners for 5 months of the HOA dues for the year because we were using the house we had purchased for that portion of time. Well, I completely forgot about this. It completely slipped my mind that come January, we would have to pay the $1,100 worth of HOA dues. So I’ll never forget that first January in our house, this letter arrives in the mail. It was the HOA bill, and it was for $1,100. And I was not prepared for it, at all! So we had to actually dip into our savings to pay that HOA bill, and then eventually refill our savings. The day that I had to pay that bill is the same day that I decided to set up a sinking fund for HOA dues. We actually contribute $150 a month to this sinking fund because our HOA dues are an annual fee and when it comes around, I want to be able to have the money on hand to pay for them without stress.


The fifth hidden home buying cost that I really want you to think about if you’re going to purchase a home is the cost of utilities. This includes things like water, trash, electricity, and gas. And if you have a furnace, you’re going to have a larger increase in your utilities than if you were a renter. Especially if your utilities were included in the rent before.

When I was in college, I rented an apartment with my friend Jessica and we lived there for six months. Everything was included. It was amazing. It was $100 a month for a two bedroom apartment. The electricity was included, the water was included the cable and internet were included. That is so uncommon these days! It wasn’t the nicest place, but it was amazing for that reason.

Unfortunately, that’s no longer the case. We have to plan for higher utility costs. Different things like the size of your home, how open it is, how old it is, can all have a huge impact on your utility costs. I know that for us, our water bill is higher here in this house compared to our last 2 homes, because our yard is bigger and we have a sprinkler system. So even just watering our grass takes more water which impacts our utility bill. Also different seasons of the year are going to have a bigger impact on your utility bill. So for us, living in Texas, our electricity bill raises significantly in the summertime because it takes more work to cool our house down.

When I bought my home many years ago this was definitely a cost that I didn’t take into consideration. Since I have owned homes before, I was unaware of how much those utilities would increase due to the above factors, and I was honestly shocked at the price of them.


The sixth hidden costs for a homebuyer are renovations. Oh my goodness, renovation costs can add up quickly when you want to update your home. Our first two homes that we purchased were actually new builds. So we didn’t have a lot of renovations. We just did things like paint and maybe update the backsplash in the kitchen. But the home we moved into now is a different story. We’ve renovated a couple of areas and we actually just finished renovating our kitchen. In fact, my husband is actually putting in the backsplash in our kitchen as we speak. But we also hired a contractor to do the rest of the kitchen.

And let me tell you, it’s expensive! Those renovation costs have increased significantly since the pandemic. And even though we were slightly under budget for our kitchen renovation, it’s only because we built in a large buffer to cover higher costs. We built in a buffer of probably about $3,000 to cover anything that came to us unexpectedly. For example, during our kitchen renovation we ran into unexpected plumbing and electrical issues. So renovations do add up and you definitely have to consider possible issues that can cost more money.

Are renovations always a necessity? No. Most of the time, it’s not something that you need to have. But if you’re going to do it, it’s important to know that this is a cost that comes with owning a home.


Number seven is maintenance, and boy do I have a story for you! We bought our first home in the middle of our debt free journey. Actually, we bought it a year into our journey to be exact. So we were working to pay off debt, and luckily we bought a home that was well below the 30-35% recommendation. So essentially our mortgage payment was about 20% of our take home pay every single month. That was great for us because I did not realize the cost of maintaining a home would be so expensive!

Whether it’s lawn care, home exterior, or pest control, home maintenance costs add up! These are all typically things you do not have to pay for when you rent. I’ll never forget the first year we lived in our very first home, our lawnmower broke! We had to pay to replace it since it was either that or pay someone else to mow. But honestly these are things I didn’t factor in when I started looking to purchase our first home.

So be sure to factor regular maintenance costs into your budget, whether you set aside about a $50 a month into a sinking fund, or you budget for ongoing costs, a good rule of thumb is to save about 1% of your home’s cost per year. This is a really good just kind of guideline to get you started


The eighth hidden costs of buying a home – and I’m just gonna say it- it’s is furniture! Filling up a home gets expensive…fast! Especially if you choose a home that is large. And I don’t know about you, but when I moved into my home, I immediately wanted to fill ALL the spaces with beautiful items to make my house feel like a home for my family and I. It takes a lot of self discipline, which I did not have all of the time, to actually slowly fill your home and choose pieces over time or wait and save up for them.

So if you’re buying a home that has more rooms than you’re used to, just know that furniture adds up fast…decorating adds up fast…curtains, curtain rods, all of those things can get expensive very quickly. And that is typically not something that people consider when they’re thinking about purchasing a home or moving to a bigger one.


The ninth hidden cost that every homebuyer needs to be aware of are emergencies. I’m talking home-related emergencies. This year alone we have spent over $2,000 on a plumbing issue. We live in a home that’s about 30 years old. Our kids upstairs bathroom has given us so many headaches when it comes to plumbing. Within the first couple of months of moving into our home, we spent 1000s of dollars fixing old pipes and plumbing issues. They had to get into the sheet rock and had to open holes up in different walls to fix the issue.

You never know when it’s going to happen. You never know. Which is why having money set aside for these types of emergencies is essential. I mean, living in Texas, if your AC goes out in the summer, that’s considered an emergency. If you need to replace your AC, it can cost you 1000s of dollars.

So I would love for you to have an emergency fund in place when you own a home! Because when you’re a homeowner, you will potentially need it more than if you are a renter. If you’re a renter and your fridge goes out, or your dishwasher breaks, or your AC stops working, or if any of the plumbing issues happen, it’s not on you to fix. But when you own the home, it is that is your responsibility to pay up and fix it.

Having an emergency fund in place is essential to help you avoid debt if at all possible. It’s imperative. We were very fortunate because our first home that we owned didn’t give us a lot of issues. We were living paycheck to paycheck at the time and we were in the middle of paying off debt and didn’t have a lot of money. So it would have been a real nightmare if that wasn’t the case.

The home we’re in now — this beautiful, amazing, wonderful home that’s older in age — has given us a run for our money! So having that emergency fund in place has been life-changing for us.

So that’s it! I hope you save this article for later when your on the hunt for your next home! Be sure to sign up for my FREE budget class below if you’re wanting to learn more about how to financially prepare for future costs and unexpected expenses!