Getting pre-approved, saving your down payment and understanding your closing costs is a great start. A good lender and a good Realtor will walk you through most of the expected line items before you ever sit at the closing table. But there's a second category of costs that show up after closing, and sometimes months after, that genuinely catch first-time buyers off guard. Here are seven worth knowing about before they find you.
1. HOA dues are not escrowed If you're buying in a community with a homeowners association, your HOA dues are billed separately from your mortgage. They are not included in your escrow payment. This trips up first-time buyers more than almost anything else. Some don't realize the bill is coming. Some don't recognize it when it arrives. Some assume it was somehow rolled into what they're already paying. It wasn't. HOA dues are typically billed quarterly or annually and missing them can result in late fees or, in more serious cases, a lien on your property. Before you close, ask your Realtor exactly how and when your HOA dues are billed and set a reminder so the first invoice doesn't catch you flat-footed.
2. Your escrow payment can increase significantly in year two Your mortgage payment feels stable after closing. Then the escrow analysis comes. In Texas, when a property changes hands, the homestead exemption and any prior appraisal cap are removed. The appraisal district can reassess the property at full current market value with no cap on how much it increases. If your lender escrowed based on the previous owner's lower assessed value, the shortfall hits you all at once. This is especially acute with new construction, where some builder lenders initially escrow based on land value only rather than the full improved value of the completed home. When the full assessment kicks in, the escrow adjustment can be significant. Ask your lender, before closing, exactly what value they used to calculate your tax escrow and what you should expect at the first annual adjustment. Randy Watkins at Miramar Mortgage is someone I trust to give buyers a straight answer on this before it becomes a problem.
3. Your homeowner's insurance premium may not stay flat The premium you pay at closing is based on the quote you got during the transaction. But insurance premiums in North Texas have been rising, and at your first renewal you may see a meaningful increase. Carriers are also re-evaluating coverage in hail-prone markets, which most of DFW qualifies as. This doesn't mean you should overpay for coverage upfront, but it does mean you should not assume that first-year number is what you'll pay forever. Build some cushion into your monthly budget.
4. Moving costs, especially long-distance ones, are much higher than expected Local moves within DFW are manageable. Long-haul moves are not cheap. A move from the northeast or west coast can run $8,000 to $15,000 or more depending on volume and timing. Get at least three quotes early, before you're under contract, so you're not negotiating from a position of desperation. If you're coming from a distance, ask about availability windows because reputable movers book up fast, especially in summer.
5. The first few weeks of ownership always cost something Locks need to be rekeyed. A deep clean may be needed before furniture goes in. Window coverings, a refrigerator if the seller took theirs, a garage door remote that works — it all adds up fast. Budget $1,000 to $2,000 as a cushion for the immediate post-close period. It will get spent.
6. Something will break, and it may not be fully covered Murphy's Law is that the dishwasher leaks, the garbage disposal dies or the HVAC makes a new sound on almost exactly the day you take ownership. A home warranty can help, but warranties have exclusions, waiting periods and coverage limits. Pre-existing conditions may not be covered. Items that were disclosed may not be covered. The repair you need most urgently may fall into a gray area. A home warranty is worth having, but it is not a substitute for a cash cushion. Keep at least $1,500 to $2,000 in reserve for repairs in year one that don't go perfectly through the warranty process.
7. Utility deposits and setup costs in newer communities In some of the faster-growing communities in Collin, Kaufman and Rockwall counties, you may be setting up service with smaller or unfamiliar utility providers. Some require deposits for new customers. Internet installation timelines can stretch out longer than expected. Setting up electricity, gas, water, trash and internet all at once takes time and follow-up. Start this process as early as your move-in date allows and budget a few hundred dollars for deposits that may or may not be refunded down the road.
The buyers who navigate their first year of ownership with the least stress are the ones who went in knowing that the purchase price is not the last number they'll write a check for.
Want to walk through the full cost of ownership before you start your search? Let's talk now so your budget reflects reality, not just what the mortgage calculator shows.
