After finding that perfect first house, jumping on the listing with a quick written offer can be tempting. But wait: there’s more to purchasing that home than simply hitting the asking price. Want to win at the real estate game without taking a significant financial hit? Check out these first-time home buyer costs and get familiar with them before making an offer on any property.

When purchasing a home with the financial assistance of a mortgage, buyers will have to pay back the home purchase cost in addition to the interest on that loan.

But how much interest will there be on a loan? Several factors impact this home-buying cost, including: 

1. Interest rates, reflecting the rate at which lenders charge loan interest.  
2. The Federal Reserve Fund rate, which helps banks and other lenders determine loan interest rates. 
3. Loan size, since interest on a larger mortgage costs more than on a smaller one.
4. Outstanding principle, or the initial loan amount left to pay off, since interest costs will decrease as the initial loan is reduced. 
5. The terms of the loan, expressed in years. Typical terms include 30-or-15 year mortgages, with better interest rates typically accompanying shorter mortgage terms. 

After all these factors are considered, lenders charge mortgage interest on a monthly basis, using the following calculation: take the outstanding loan value, multiplied by the interest rate, and divided by 12.

One other piece of advice for first-time home buyers: there are different ways to structure a mortgage. Some options allow borrowers to make interest-only payments, thus reducing their monthly expenses initially. However, this option will extend the time to pay off a loan and keep interest payments high since the initial loan size won’t change with these payments.

Some first-time buyers will be required to purchase Private Mortgage Insurance or PMI, so, this is one of the important home-buying costs to consider before writing an offer.

PMI is arranged by and protects lenders, yet private insurers issue it. Typically, lenders will require a PMI policy if buyers put down less than 20 percent of the home’s purchase price with an initial payment. Most PMI policies require monthly payments, which will be rolled into the mortgage payment. Sometimes, buyers must also pay an up-front PMI premium at the home closing.

In almost any locality in the United States, buyers will be required to pay annual property taxes and purchase a home insurance policy.  Property taxes vary by town, city, and state, but the amount buyers must pay yearly should be clearly stated on any property listing. If this sum is not included with a listing, ask the listing agent for the information or check with local authorities. If purchasing a house using a mortgage, the monthly premium paid will likely include the expense of the home’s property taxes.

Separately, most lenders will require buyers to invest in home insurance. This expense will depend on the home’s purchase price, the amount of coverage required by a lender, the policy deductible (the expense home buyers will have to lay out before receiving funds on an insurance claim), and the home’s location. Having a good credit score and opting for a higher deductible can reduce the premiums on a home insurance policy; having filed previous claims on a renter’s insurance policy can increase the cost of premiums.

While a home insurance policy will cover damage from events such as wind storms and lightning strikes, it won’t cover flood or earthquake-related damage—that is only covered by flood and natural disaster insurance policies.  Home buyers in the nation’s listed Special Flood Hazard Areas (SFHAs) will be required to purchase flood insurance. Still, anyone can purchase federal flood insurance, so long as their prospective community participates in the National Flood Insurance Program (NFIP.) Buyers who live outside floodplains can usually purchase affordable policies while insuring homes in floodplains is typically very expensive.

When considering making an offer on a house, it’s critical to consider how many repairs will need to be made to the property. Often, first-time home buyers will write an offer and then be floored by the necessary repairs they need to make after an inspection. To be safe, include a clause in any written offer stipulating that the offer may be adjusted or reneged following the inspection.

While not every home buyer will face these expenses, ask about them before making an offer on any prospective home purchase.

Also known as a homeowner’s association fee, these are dues paid on a monthly basis by homeowners living within the community; they help maintain the association’s houses, amenities, and common areas.

Buyers may face special assessment taxes levied by local governments; they typically go toward local improvement projects in a specific district, which is why nearby property owners are the only ones to pay these fees.

These expenses will fluctuate based on the buyers’ personal usage once taking ownership of the home. Still, some of these first-time home-buying costs will be dictated by the unique features of a house. So it’s wise to ask sellers to see the past few months’ utility and electric bills before making a written purchase offer.

After considering all these complex first-time home buyers’ costs, one more expense to become aware of is the closing costs!

Closing costs are the fees and expenses paid for securing a home loan that go above and beyond the initial downpayment. Typically, closing costs are 3 to 5 percent of the mortgage value. They may include title insurance, fees for an attorney, and a home appraisal, but the exact laundry list will vary by lender and location.

What first-time home buyers’ costs took you by surprise? Got any advice for first-time home buyers that you want to relate to? Share in the comments below!