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8 Expenses for New Homeowners to Prepare for

New Expenses for Homeowners

As you are preparing to purchase your first home, you already know that you’ll need to save a lot of money upfront for your down payment and closing costs. But homes often come with a long list of additional expenses, and it’s important to include them when you consider the total cost of buying a home, so you can make smart budgeting decisions now, and in the first few years of homeownership.

Because owning a home can be costly—the average homeowner spends $7,000 just on fixes and changes to their new home in the first year—having a realistic expectation of costs can not only allow you to adjust your expectations but also avoid the pitfalls of spending beyond your means, which can put your new home loan (and home!) in jeopardy. Let’s take a look at some of the biggest homeownership expenses you’ll face as a first-time homebuyer to help you prepare for these costs.

Your Mortgage Payment

Your monthly mortgage payment is to be expected, but keep in mind that while you can estimate your payment based on your general home buying budget, it can vary based on a number of factors, including:
  • Length of mortgage term (30 years vs. 15 years)
  • Interest rate
  • Size of down payment
  • Type of loan (Conventional, vs. FHA, vs. USDA, etc.)
Your lender can give you the best idea of what you can expect to pay, and when you apply for a loan you will receive a loan estimate with more specific numbers. However, to get a general sense of your monthly loan payment (not including taxes, insurance, and mortgage insurance), you can use a mortgage calculator.

For more tips on how to prepare for your mortgage application and find the right loan for you, check out our First-Time Home Buyers Guide For Northwest Arkansas.

Homeowners Insurance

When you finance your home purchase with a mortgage, your homeowners insurance will usually be added to your monthly escrow fees, and paid for by your lender or mortgage servicer. While homeowners insurance isn’t required in Arkansas or Missouri, if you have a loan on your home, you’ll need it. After your home is paid off, you’ll pay your homeowners insurance policy directly.
You’ll need to obtain homeowners insurance before settlement. If you already have car or renters insurance, contact your current provider to see if there are multiple policy discounts available. The Missouri Department of Insurance offers thorough and helpful answers to Homeowners Insurance FAQs, including tips for how to lower your premium and explanations of common terms and conditions.

Homeowners' insurance and property taxes are usually added to escrow fees and paid by your mortgage lender.

Property Taxes

Like insurance, when you have a mortgage payment your property taxes are usually paid out of your escrow, and additional monthly fee you pay each month on top of your principal and interest. While online listings usually give you an estimate of your expected property taxes, you can also visit your local government’s tax collection website for more information:

HOA Fees

While most homes in Arkansas and Missouri are single-family residences with no affiliated homeowners association, if you are moving into a planned community, condominium complex, or 55+ neighborhood, you may be required to pay monthly, quarterly, or annual HOA fees. Generally, these fees cover basic services including snow removal, landscaping, and utilities and maintenance of common areas. Sometimes they cover additional items like cable TV or (some) individual property maintenance like pest control.

While an HOA fee is an added expense, it can possibly save you money on other parts of your budget. Regardless, if you are moving into a home with an HOA, be sure to add it to your monthly expenses. In addition to regular fees, you may be occasionally required to pay a ‘special assessment’—a one-time fee for emergency or major repairs.


If you’re moving from a shared living situation, your parents’ home, or your own, smaller apartment, you may be surprised by how much utilities can add to your monthly cost of living. While some utilities like water usage are tied to the number of people in your home and your habits, the bigger your new home, the more your costs for things like heating, cooling, and electricity will be. Other expenses, like internet, cable or satellite, and phone bills may be similar to what you are paying now, depending on your provider available.

When purchasing a home, you can ask the previous owner for their utility bills to get a sense of what they’re paying, to see how energy efficient the home and its mechanical systems (like furnaces and hot water heaters) are. Although, according to the Global Energy Institute, both Missouri and Arkansas have some of the lowest utility rates in the country, expect to pay between $350-$450 per month, on average.

Factor in monthly utility costs when determining how much mortgage you can afford.

Home Maintenance and Repairs

In addition to your expected bills, keep in mind that owning a home comes with a significant amount of upkeep—from regular maintenance to occasional major and minor repairs. This will vary widely based on the size and condition of your home, but plan to budget 1-4% of your home’s value each year. Expected expenses to plan for include:
  • Heating and cooling systems: You’ll need to replace filters regularly and pay for routine checkups (usually each year).
  • Landscaping: Whether you hire a company or buy the tools to do it yourself, budget for grass cutting, tree trimming, raking, mulching, and flower bed maintenance.
  • Wear and Tear Repairs: You’ll experience minor repairs, including leaky faucets, broken light switches, or damaged drywall, at least once a year.
  • Appliance Replacement: Quality appliances should last at least 10 years, according to Consumer Reports. Budget for replacement of appliances nearing the end of their lifespan.
  • Larger Costs: Roof, window, siding, and carpet replacement, driveway resealing, rewiring, and exterior painting are just a few of the items you’ll need to budget for.
Lastly, you need to expect (and be prepared for) the unexpected. It’s a good idea to have a special fund or percentage of your budget set aside to cover your emergency repairs. These costs could include repairs for storm or water damage, termite damage, and mold, as well as structural issues. While homeowners insurance may cover some of these items, you will likely still need to pay a deductible (check your policy), and some repairs—including those for flood, earthquake, or sinkhole damage—are usually not covered unless you have a special policy. Consider additional insurance, especially flood insurance, if you live in an area prone to natural disasters.

Furniture and Appliances

If your new residence is significantly larger than your current one, or you want to start off with a clean state with more sophisticated furnishings, you will want to set aside a significant budget for new furniture. Furthermore, not all homes come with appliances—if yours doesn’t, these purchases can really add up.

How much can you expect to spend? According to Home Advisor, you’ll pay about $3,500 on the low end, with an average cost of $16,000 to purchase furniture and decorations for an entire home. Appliances range widely; expect to pay $500-$2000 for a washer/dryer set (most common appliances to be excluded from home purchase), or $650-$3000 for a refrigerator, and $450-$3000 for a stove, plus installation costs

If your savings are depleted from your down payment, consider that many stores offer payment plans with a period of 0% interest financing. Our CS Bank Credit Card also offers an introductory rate of 0% financing as well as rewards. Just be sure that you have a realistic plan for how to pay off debts before the interest rate kicks in, as after the introductory period, many consumer credit interest rates can be exceptionally high. Hold off on making any large credit card purchases, or any type of financing until after you’ve closed on your mortgage and moved into your new home.

You may want to set aside a significant budget for new furniture and appliances

Don’t Forget Your Personal Expenses

While you’re working on your budget for your home, take the time to create a personal budget, if you haven’t already. This will give you a clearer picture of what you can afford to spend on your house, and help you set limits on your purchases after settlement (including costs for decorating your new home!), to ensure that you meet your monthly obligations.

In addition to your usual living costs, be sure to include your personal expenses, especially your discretionary ones or those that have a little bit of wiggle room. If you find your budget is tight, you can make some modest cuts to these items in order to stay on track. Expenses to consider include: gym memberships, subscriptions, cleaning services, streaming services, entertainment, and hobbies.

For more advice on ways to create a workable budget, check out our post, How to Make a Budget: Stop Overspending and Reach Your Financial Goals.

Let CS Bank Help You Reach Your Homeownership Goals

Purchasing your first home is a major milestone, and can involve a lot of big decisions and complex calculations. CS Home Mortgage is here to help you on your journey to homeownership, answering your questions, assisting in your loan application, and working diligently with your real estate agent to help ensure a smooth, worry-free settlement.

Contact us or visit one of our locations in Northwest Arkansas (Eureka Springs, Berryville, Harrison, Huntsville, and Holiday Island) or Southwest Missouri (Cassville) to see what we can do for you!