View all posts

Navigating the First Year of Home Ownership Expenses


By: Lisa Bonacci

Navigating the First Year of Home Ownership Expenses

The cost of buying and maintaining a home—and the large number of fees and expenses you'll expect to pay—can be daunting for first-time buyers. From closing costs to ongoing repairs, buying and maintaining a property can be a huge undertaking. However, when potential homebuyers know what to expect, and prepare accordingly, these expenses don’t need to be an insurmountable hurdle to owning your own home.

While we’ve covered the homebuying journey, we wanted to take the time to discuss what you can expect during your first year of homeownership. In this blog, we’ll provide a near-exhaustive list of these expenses, so you can create a budget for home buying that not only considers your initial costs, but also supports your financial security through your first year or more of homeownership. 

The Upfront Costs of Purchasing a Home

Before we delve into the costs you’ll need to budget for during your first year of home ownership, let’s take a quick look at your upfront costs—those that will be due at or before settlement.


Also called ‘earnest money’ or a ‘good faith deposit,’ you may be required to provide cash to hold the home when you enter a purchase agreement. The amount can vary but expect to pay 1-3% of the purchase price. 

Keep in mind that this is not an additional expense. If the deal falls through, you’ll get your money back. And if it doesn’t, it can be applied to your down payment or closing costs. Just be prepared to have this cash ready when you go to put in an offer. 

Closing Costs 

Generally 1-3% of your total loan amount, closing costs are due at the settlement or closing of your home purchase. Costs can include:


  • Lender’s fees for origination, processing, and underwriting the loan
  • Appraisal costs to determine the fair market value of the home and if it aligns with the purchase price
  • Home inspection to find any hidden defects that could detract from the value or soundness of the home
  • Title search and title insurance to ensure there are no unknown liens on the house
  • Deed recording fees to record the transfer of the deed
  • Document prep fees
  • Credit report fees 

Down Payment

In addition to typical closing costs, your down payment will also be due at closing. As mentioned above, conventional loans often require 20% or near 20% for a down payment. However, there are loan products available that have lower down payment requirements and many homebuyer assistance programs in Scranton, Lackawanna, and Monroe counties to help cover closing costs or provide down payment assistance. Your mortgage lender at Citizen Savings Bank can help you match you with the right loan and assistance programs to meet your budget. 

Ongoing Homeownership Costs

The above costs are what you can expect to pay before you even receive the keys to your new home. However, homeownership costs and expenses continue as long as you own your home.

Your Mortgage Payment

When you think about the ongoing costs of owning a home, the monthly mortgage payment may be the first thing that comes to mind. Your mortgage payment doesn’t just include paying back your loan, but also includes items like mortgage insurance, homeowner’s insurance, and property taxes. Let’s take a look at each of these items.

Mortgage Payment (Principal and Interest)

Your month payment size will depend on a number of factors including:


  • Your total loan amount (minus your down payment)
  • Your interest rate and type (fixed rate vs. adjustable rate)
  • Your loan term (15 vs. 30 years, for example)


Ultimately, your monthly payment will be calculated by spreading your total loan amount over the course of your term, with interest added. If you’re applying for a mortgage with a fixed rate, the easiest way to determine your monthly loan payment is to use a payment calculator, like our simple loan calculator.

While fixed-rate mortgages provide the certainty of a stable monthly loan payment, as well as a guaranteed interest rate over the life of your loan (regardless of current market rates), there are reasons why individuals may prefer an adjustable rate mortgage (ARM). Adjustable rate mortgages often begin with lower, fixed monthly payments for a set duration of  time—commonly five years. After this period, interest rates will reset regularly (usually each year) to the current market rate. Reasons why you may prefer this loan configuration include:

  • Current interest rates are high and you believe they will go down in the future
  • You expect your income to increase in the future
  • You expect to sell or refinance your home before the initial, low-interest phase of an ARM


To compare our current fixed and adjustable mortgage interest rates, you can visit our Rates Page.

One of the most important aspects of purchasing a home is determining the size of monthly payment that will fit into your budget. In our First-Time Homebuyers Guide for Northeast PA, we provide tips for how to assess your financial situation, understand the current local housing market, and create realistic expectations of how much you can expect to pay.

Property Taxes

In addition to your loan payment, there are other monthly charges that will be incorporated into your total mortgage payment, and property taxes can make up a large portion of those. Depending on the location of your home, these could include municipality taxes, county taxes, and school taxes. 

Online listings for individual homes will usually include details on property taxes, but before you start shopping, it’s a good idea to have a general idea of how much you will expect to pay. In Monroe County the average cost for a home is $3,454, or 1.67% of the value of the home, while in Lackawanna County the average cost of property taxes is $1,954, or 1.43% of the value of the home. 

Tax payments will be paid directly to the tax-collecting agency by the bank or by the borrow if they choose not to escrow. The total costs for the year are divided up by 12, and collected monthly as part of your mortgage payment. These funds are deposited by your lender into your mortgage’s escrow account, a bank account managed by your lender which is used to accumulate funds for necessary payments.

Homeowners’ Insurance

In addition to property taxes, it’s common for homeowners’ insurance costs to also be added to your monthly payment, collected as part of your escrow payment, and paid out by your bank each year. According to This Old House, the average monthly cost for homeowners insurance in Pennsylvania was $77.50 in 2023. 

While homeowners’ insurance is not required to own a home in Pennsylvania, it is required by your mortgage lender to obtain a mortgage. When you purchase a home, you’ll be responsible for obtaining insurance, giving the plan details to your real estate agent and bank. Your real estate agent can help you select an insurance company if need assistance—though you can also often receive multi-policy discounts by using the same company that you use for your car insurance.

Mortgage Insurance

Lastly, depending on your down payment size or type of loan, you may be required to pay mortgage insurance. 

For instance, with conventional loans offered by your bank, you’ll be required to pay PMI, or private mortgage insurance if you don’t have a 20% down payment. However, once you’ve paid off 20% of your loan, you can request for this fee to be eliminated.

For FHA loans, government-backed loans offered through your bank that have lower down payment requirements, you will have a mortgage insurance premium for the life of your loan. Currently, the annual fee is equal to 0.55% of your loan balance, divided up over your monthly payments. 

HOA Fees

If you’re moving into a community or development that has a homeowners’ association, you may have to pay monthly, quarterly, or annual HOA fees. This fee is not included in your mortgage payment and can vary depending on the community. The national average for HOA fees is $170/month.

HOA fees typically cover:

  • Trash removal
  • Snow removal
  • Ground maintenance and landscaping
  • Pest control
  •  Expenses for common areas:
    • Gate security guard
    • Electricity and utilities
    • Pool maintenance  


Sometimes there is a special assessment, a one-time fee to help cover costs of emergency work or major facility repairs. When purchasing a home, you can discuss this possibility with your realtor and the homeowners’ association of the complex to get a better idea of what you may expect.


If you are living on your own for the first time or are moving from a smaller apartment to a single-family home, you may be surprised by the cost of utilities—particularly your heating and cooling bills. If you want to minimize these expenses, you may want to limit your home searches to energy-efficient properties with updated HVAC systems, newer windows, and sufficient insulation, avoiding excessively large homes which will have significantly higher utility costs.

Utility costs you can expect to pay may include:

  • Gas/Propane
  • Electricity
  • Water/Sewage
  • Internet
  • Cable/Satellite
  • Garbage collection (if it’s not built into your HOA or taxes)
  • Other: streaming services, phone (landline or mobile), alarm/home monitoring fees

You will need to notify utility companies of your impending move before your closing. Your realtor will help you with this all-important step. Be aware that there may be additional connection fees when you start services.  


Home maintenance—which costs the average American homeowner about $3,000 per year—is one of the most dreaded aspects of homeownership. Not only can there be a huge learning curve for managing properties, but each home has different requirements depending on the size, age, location, features, and construction style. You’ll need to stay on top of routine care, as well as be prepared for occasional unexpected repair expenses.

Routine Maintenance

Even if you live in an HOA community, not all routine care everything will be covered. Common costs include:

  • Heating and cooling system maintenance: filters and annual or semi-annual checkups 
  • Landscaping/Exterior: Mowing, maintaining garden beds, purchasing plants, trimming hedges and trees, clearing gutters
  • Cleaning: Keeping your home clean is an important part of upkeep, preventing pest infestations, protecting flooring, and helping to ensure your resale value
  • Small Repairs: From replacing weather stripping to changing light bulbs and smoke alarms, there are many small tasks you’ll need to do on a regular basis around your home 

Emergency and Occasional Maintenance

Routine maintenance can reduce the chances of experiencing a stressful repair emergency, but every home will have the occasional need for major or unexpected repairs. Setting aside funds each month in an emergency expense account can help offset these costs as they arise. Areas of your home that are most often require repairs include: 

  • Electrical panels and wiring
  • Plumbing
  • Structural/foundation
  • Heating/Cooling System
  • Roof
  • Windows


If you live in areas prone to storms, flooding, or termites, it’s also helpful to take measures to reduce risks of termite or water damage. Ideally, your home should pass inspection or any major problem areas will be highlighted in your home inspection and you’ll have the opportunity to address them before closing. However, you can further reduce your early maintenance expenses by buying a newer home or buying a home that comes with a warranty.

One-Time Costs

You’ve put in an offer on your home and are already excited about the prospect of making it your own: buying new furniture, purchasing state-of-the-art appliances, and decorating it to suit your tastes. But it’s important to budget for these costs—you’ve just spent a lot of money on your closing and down payment, and your new mortgage payment may be higher than your previous housing costs. Overspending can jeopardize your financial stability and ability to make your home payments, putting your new home at risk.

When making a budget for one-time expenses for new homeowners, be sure to include:

  • Furniture to fill your new space
  • Appliances, if they don’t come with the home
  • Decorations from bedding to artwork
  • Moving expenses

Determine an amount you can afford and stick to it as closely as possible. Some stores may offer financing deals for furniture and appliance purchases, including 0% interest for an introductory period—just be certain you are able to pay off your purchases before this period ends, as they often have steep interest rates following.

Let Citizen Savings Bank Help You Purchase Your First Home

With special programs for first-time homebuyers and years of experience working with area real estate agents, we can help you find the right Mortgage Loan to fit your budget and your needs, minimizing your home ownership costs. We will work with you one-on-one, helping you navigate the homebuying process, reducing stress, and making your experience go as smoothly as possible.

Stop by one of our local branches throughout Northeastern PA in Clarks Summit, Mt. Pocono, Taylor, Honesdale, and Scranton to see how we can help you achieve your goal of homeownership.