First-Time Buyer Financial Checklist: Costs Beyond the Down Payment

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Buying your first home is an exciting milestone, but it’s also one of the biggest financial decisions you’ll ever make. While many first-time buyers focus on saving for a down payment, that’s just one of the financial requirements that comes with purchasing a home.

The reality? There are several additional costs to plan for that will occur before, during and after your purchase. Understanding these upfront can help you avoid surprises and make more confident, informed decisions along the way.

Here’s what to expect.

1. What is an earnest money deposit — and can you lose it?

Once your offer is accepted, you’ll typically submit an earnest money deposit. This is essentially a good-faith payment that shows you’re serious about buying the home.

  • It’s usually 1–3% of the purchase price
  • The deposit is held in escrow and applied toward your closing costs or down payment
  • It can be forfeited if you back out of the deal for reasons not covered in your contract

A REALTOR® will guide you through how this works and help ensure your interests are protected.

2. Home inspection costs: what first-time buyers should budget

A home inspection is one of the most important steps in the buying process. It helps uncover potential issues before you finalize the purchase.

  • Typically ranges from $300–$600+
  • Additional inspections (radon, sewer, mold) may cost extra

This is where working with a trusted REALTOR® matters — they can recommend qualified inspectors and help you interpret the results so you can negotiate repairs or credits, if needed.

3. Why your lender requires a home appraisal — and what it costs

Your lender will require a home appraisal to confirm the property’s value matches the purchase price.

  • Usually $400–$700
  • Paid upfront or at closing

If the appraisal comes in lower than expected, your REALTOR® can help you navigate next steps, whether that’s renegotiating or exploring other options.

4. Closing costs explained: the 2–5% you can’t afford to overlook

Closing costs are a collection of fees required to finalize your home purchase. According to Freddie Mac, these can range from 2–5% of the home’s purchase price.

They may include:

  • Loan origination fees
  • Title insurance
  • Attorney fees (common in Illinois)
  • Property taxes and prepaid interest
  • Recording fees

Your REALTOR® and lender will walk you through a detailed estimate so you know exactly what to expect before closing day.

5. Don’t forget moving costs: budgeting for the final stretch

Whether you’re hiring movers or doing it yourself, moving comes with costs that can add up quickly.

  • Professional movers: costs vary based on distance and size
  • Truck rentals, packing supplies and storage if needed

Planning ahead can help you budget and reduce stress during an already busy time.

6. First-month home expenses: what to expect after you get the keys

Once you get the keys, there are often immediate expenses to make your new home comfortable and functional.

These might include:

  • Furniture and appliances
  • Window treatments
  • Locks and security updates
  • Minor repairs or touch-ups

Even smaller purchases can add up, so it’s wise to set aside a “first few months” fund.

7. Monthly costs of owning a home that most first-time buyers underestimate

Homeownership doesn’t stop at closing — it’s an ongoing investment.

Be prepared for:

  • Property taxes
  • Homeowners insurance
  • Utilities and maintenance
  • HOA fees (if applicable)

First-time buyers often overlook these recurring costs, but they are critical to long-term affordability.

How a REALTOR® helps you manage — and reduce — homebuying costs

Navigating these costs on your own can feel overwhelming, but you don’t have to.

A REALTOR® does more than help you find a home. They:

  • Break down the full financial picture — not just the listing price
  • Connect you with trusted professionals throughout the process
  • Help you negotiate and potentially reduce certain costs
  • Ensure you’re making informed decisions every step of the way

In a market as dynamic as Chicago, local expertise matters. A REALTOR® understands neighborhood nuances, market conditions and the resources available to first-time buyer, including programs that can help reduce upfront costs and expand access to homeownership.

The bottom line: start with the right financial plan

Saving for a down payment is a major achievement to be proud of, but it’s only one piece of the homebuying puzzle.

By planning for the full range of costs, you’ll be better prepared, more confident and ready to step into homeownership with clarity.

And when you’re ready to start the journey, a REALTOR® is your best partner in making it happen, helping you move forward with knowledge, confidence and the right strategy for your goals.