Hidden Costs of Homeownership

Buying a home is a big milestone – and an exciting one! But beyond the monthly mortgage payment, there are a number of costs that can catch even the most prepared buyer off guard.

Did you know, the average cost of owning and maintaining a single-family home in the U.S. now averages more than $21,000 each year, according to a recent study from Bankrate? Unexpected costs are an “when,” not a “if.” So, when something breaks or needs repaired, it’s important to be prepared to address it. More than 83% of homeowners had to deal with unexpected repairs in 2024. It’s safe to assume you’ll deal with them, too.

Let’s break down the top hidden costs based on where you are in your homebuying journey.

Phase 1: Prior to Buying

Before you even step foot into your new home, there are some key costs to know about – ones that don’t always make the standard checklist.

You’ll likely need to pay for things like a home inspection, an appraisal, and a deposit to show the seller you’re serious (called “earnest money”) about purchasing their home.

PSECU Prep Tips:

• Choose a lender like PSECU that offers competitive rates, a low origination fee, and no underwriting, processing, application, appraisal, or flood certification fees, which can save hundreds in up-front costs, and set aside extra savings for up-front costs beyond a down payment.
• Ask your lender for an estimated cost sheet early in the process.
• Don’t forget about property taxes and homeowners insurance, which are often part of your monthly mortgage payment.

Phase 2: Buying the Home

Once you’re ready to close on your home, some of the biggest one-time expenses start to surface. Closing costs are often underestimated, but they’re crucial to factor into your budget. These can add up quickly and usually require you to have the money available via cashier’s check or wire transfer. To get a rough estimate of how much you’ll pay in closing costs, use a closing cost calculator – you’ll need to enter the county your home’s located in, home purchase price, and down payment amount to receive an estimated closing cost range. Closing costs typically include things like lender fees, title insurance, recording fees, and transfer fees. You’ll also need to secure homeowners insurance, which PSECU Protect, LLC1 can help you out with!

PSECU Prep Tips:

• Ask your mortgage originator for a closing cost breakdown up front so you know what to expect.
• Consider a larger down payment, if possible, so you can eliminate PMI and lower your monthly costs. First-time buyer? Check out our First-Time Homebuyer Program², and finance up to 100% of the purchase price (no minimum down payment required).
• Bundle homeowners insurance with other policies. PSECU Protect, LLC is a great place to start.
• You may be able to get assistance with closing costs from the seller or another source. Ask your realtor or mortgage originator if this option’s available to you.

Phase 3: Directly After Buying

You’ve got the keys, and the moving truck has pulled away – but there’s still new expenses waiting to greet you. Rekeying locks, installing blinds, and purchasing appliances that weren’t included in the home’s sale, are typically on a new homeowner’s to-do list. And while small, those initial home maintenance tasks – like HVAC servicing, gutter cleaning, and pest prevention can add up fast.

Furnishing your place is another hidden cost to consider. Whether you’re moving into your first home or upgrading to more square footage, filling up those extra rooms is another expense that’s smart to plan for.

PSECU Prep Tips:

• Prioritize what you need now versus what can wait.
• Use digital banking alerts to keep an eye on your spending habits.
• Use our Founder’s Rewards Card to earn cash back as you furnish your new home.
• Depending on your down payment amount, you may want to consider a home equity loan or line of credit.

Phase 4: After Getting Settled In

Once you’re settled in, the biggest hidden costs tend to appear over time. Maybe your HVAC starts making strange noises or your roof starts to leak. These long-term maintenance needs are a normal part of owning a home, but they’re also why it’s important save for the unexpected. It’s not about expecting the worst – it’s about being prepared for what tomorrow may bring.

PSECU Prep Tips:

• Review your homeowners insurance annually and ask for ways to save.
• Keep a simple preventative maintenance checklist to stay ahead of larger repairs and revisit it seasonally.
• Set aside funds in a money market account to grow your emergency savings while keeping them accessible.
• As your equity increases, tap into it with a home equity loan or line of credit to pay for renovations and repairs.

Homeownership is a Journey

The path to owning a home will likely present a few surprise expenses along the way. But when you understand what’s ahead, you can budget smarter, stress less, and enjoy your space even more.

Whether you’re preparing to buy or are already a proud homeowner, we’re here to help. Explore our Resource Center for more tips and tricks on navigating homeownership.

¹Not all products, coverages and discounts are available in every state. Restrictions, exclusions, limits and conditions apply.

Insurance products are offered by PSECU Protect, LLC an affiliate of Pennsylvania State Employees Credit Union (PSECU). Available insurance products are not deposits of Pennsylvania State Employees Credit Union and are not protected by any type of deposit insurance, are not obligations of or guaranteed by Pennsylvania State Employees Credit Union or its affiliates, and may be subject to risk. Insurance products are not insured or guaranteed by the National Credit Union Administration (NCUA) or any other agency of the United States. Any insurance required as a condition of the extension of credit by Pennsylvania State Employees Credit Union need not be purchased from our Agency, PSECU Protect, LLC, but may, without affecting the approval of the application for an extension of credit, be purchased from an agent or insurance company of the customer's choice.

²Additional options for first-time homebuyer products/terms available. PMI may be required. Contact one of our mortgage originators to find out which one is right for you.