First-Time Homebuyer Advice:
Hidden Costs You Shouldn’t Overlook

Buying your first home is exciting—but it’s also a learning curve. Most first-time buyers focus on the big-ticket items like mortgage rates and down payments. But what about the costs that sneak up after closing day?

As someone who works with homebuyers every day in the Fox Cities, I’ve seen how these “hidden” expenses can surprise even the most prepared buyers. Let’s break down some of the most common—and often overlooked—costs of homeownership so you can plan with confidence.

1. Homeowners Insurance, Property Taxes, and Mortgage Insurance

Your monthly mortgage payment often includes escrow for property taxes and homeowners insurance, but the actual amounts can vary widely depending on your location and the value of your home.

In Wisconsin, property taxes typically range from about 1.2% to 2.5% of a property’s assessed value annually.

Mortgage insurance may be required if your down payment is less than 20%, which can add an upfront premium of around 1% of the loan and an annual fee of approximately 0.35%. 1

Tip: Ask your lender for a full breakdown of your estimated monthly payment, including escrow, so you’re not caught off guard.

2. Closing Costs

Closing costs typically run 2-5% of the loan amount, covering things like title insurance, appraisal fees, and legal documentation. These are due at the time of closing and are separate from your down payment.

Tip: Budget for these early and ask your lender if any costs can be negotiated or rolled into your loan.

3. Utilities and Internet Setup

If you’re moving from an apartment or rental, you might be surprised by the cost of utilities in a single-family home. Heating, cooling, water, and internet setup fees can add up quickly—especially during Wisconsin winters.

Tip: Ask the seller or your real estate agent for average monthly utility costs for the property you’re considering.

4. Yard Equipment and Maintenance

Welcome to the world of lawn care! If your new home has a yard, you’ll likely need a lawn mower, snow blower, rake, shovel, and garden tools. These initial purchases can easily exceed $500–$1,000 depending on what you already have.

Tip: Consider buying gently used equipment or waiting for seasonal sales to stock up.

5. Furniture and Appliances

Even if your home comes with major appliances, you may need to purchase items like a washer/dryer, patio furniture, or additional storage solutions. And furnishing a larger space can be a slow (and expensive) process.

Tip: Prioritize what you need immediately and build your home over time. Facebook Marketplace and local resale shops can be great resources.

6. Repairs and Emergency Funds

Every home needs maintenance. Whether it’s a leaky faucet or a furnace that quits in January, having an emergency fund is essential. We recommend setting aside 1–4% of your home’s value annually for repairs and upkeep. The older the home, the more you may need to set aside.

Tip: Start a dedicated savings account for home maintenance as soon as you move in.

We’re Here to Help

At American National Bank, we believe informed buyers make confident homeowners. We’re here to guide you through every step of the process—from budgeting and pre-approval to closing and beyond.

If you’re thinking about buying your first home, let’s talk. We’ll help you understand the full picture so you can move forward with clarity and peace of mind.

1: Wisconsin Department of Revenue – 2024 Town, Village, and City Taxes Report
https://www.revenue.wi.gov/SLFReportscotvc/tvc24.PDF