Owning a home has long been the American Dream, but if you're thinking you're done once you save that down payment, try again. There are numerous expenses that come with being a homeowner, and if you're not prepared for them, you could wind up wrecking your finances irreparably. With that in mind, here are five things you'll need to save for, on top of whatever down payment you come up with.

1. Property maintenance

The average homeowners spend anywhere from 1% to 4% of their home's value on annual upkeep. If your home is on the newer side, you might manage to stick to the lower end of that range. But if you're buying an older property, prepare to hit the high end.

House with picket fence

Image source: Getty Images.

Ideally, your earnings should be enough to cover whatever standard maintenance your home requires, but until you get a solid sense of what that number is, you're better off sticking some extra money into a savings account so you have it available. This could help you avoid debt early on as a homeowner.

2. Rising property taxes

Your property taxes shouldn't be a surprise, at least not at first, and once you know that number, you can budget for it accordingly. But one thing you should be aware of as a new homeowner is that property taxes have a tendency to rise over time, even during periods when home values drop.

Consider this: In 2000, U.S. homeowners paid around $247 billion in real estate taxes. By 2010, however, that figure had risen to $476 billion. And if you're attributing that climb to a boost in home prices, think again -- at that point, the housing market had by no means recovered from its major bust, which proves that home values and rising real estate taxes don't always correlate.

The takeaway? Stick a few grand extra into savings so that if your home is reassessed, and your property tax bill jumps as a result, you won't immediately get caught off guard. Rather, you'll have some time to get used to those higher payments and gradually work them into your budget.

3. Sudden repairs

Repairs are a fact of life when you own property, but you never know when you might face a really big one. That's why it's smart to pad your savings with another couple of thousand dollars to protect yourself from that first whopper of a bill, whether it's your heating system breaking down or your roof springing a damaging leak. Even newer homes aren't immune to repairs, and having the money on hand to pay for them will help you not only stay out of debt, but avoid stress.

4. Closing costs

Buying a home isn't the same thing as buying a piece of furniture. There are multiple administrative steps that must be taken for that sale to go through, and naturally, you'll pay for them in the form of closing costs. Closing costs will generally range from 2% to 5% of a home's purchase price, so if you're buying a $400,000 property, you could be on the hook for up to $20,000 up front. And while your lender is required to provide a good-faith estimate of what your closing costs will entail, that estimate can stray by a margin of up to 10%. The punch line? Save for those closings costs, and then put away just a little bit more.

5. Moving expenses

Whether you're moving across the country or across the road, expect to fork over a sizable sum to get your belongings from your old living space to your new home. The average in-state move costs about $2,300, as per the American Moving and Storage Association, while the average interstate move costs $4,300. And if you have oversized or specialty items to transport, your final bill could well exceed these figures, so shop around for estimates and then save as necessary.

Clearly, there are plenty of different things you'll need to save for in conjunction with your first home's down payment, but let's focus on that latter point for a second. Though you may not be required to put down 20% of your property's purchase price, it's wise to do so nonetheless. That way, you'll avoid private mortgage insurance, which can make the cost of your loan even more expensive.

In fact, your best approach to buying your first home is to sock away 20% of its purchase price for a down payment, 5% of its purchase price for closing costs, $2,300 to $4,300 (or more) depending on the nature of your move, and then another $6,000 (or more) to cover higher-than-expected maintenance, property taxes, and home repairs. Is that a lot of money to come up with? Sure. But it'll help you embark on this exciting chapter of your life from a more financially secure standpoint.

 

The Motley Fool has a disclosure policy.