I would recommend getting a good mortgage broker. You don't pay them for their services, and they will already have contacts at several banks for when you get your credit run. As well, they'll know what costs are involved as you go through the process.

Before you even sign the papers, you'll know the following:

*Down payment. I don't know how it works in the US, but in Canada it's minimum 5%. We pay insurance to bring it up to 20%. My guess is the US is the same. * Closing costs are given to you by your lawyer. Banks generally require proof of 1% of the total cost for closing costs. * Taxes are given to you by your mortgage broker or lawyer. If the previous owner paid their taxes yearly, you'll have to pay them back for the portion they paid, and that's laid out clearly in the closing costs. Go to your municipality's website and look for a tax calculator or zoning map. I know my city has both, a tax calculator and a zoning map that shows the last home evaluation cost. * Inspection is always a condition of sale. You won't remove this condition until the house passes inspection. * Insurance. You can't even get a mortgage without showing proof of home insurance.

As a previous apartment renter turned 2 home owner, these are the hidden costs as I see them:

• Outdoor equipment, such as a lawnmower, edger, shed to store it in, wheelbarrow, shovel, hose, sprinkler, etc.
• Stuff for the home itself. You have more space now, and you're going to want to fill it with pictures or couches or chairs or whatever.
• Utilities. You may be coming from an apartment where cable and power was covered, but it sure as hell isn't covered now. The issue here is you can't just ask what the previous owners paid for their usage, because that's their usage. They may keep the house at 21 all day in the winter, whereas you'd keep it at 17 during the day. For the first couple months until you get your footing, your power, water and gas bills are going to all over the map. You can call the utility company and ask for the monthly average, and that's a good budget number.
• Upgrades. You're coming from an apartment to a home, and your stuff is probably (and this is an assumption) "lower" quality. I hate to label it like that, but now that you're a home owner, you're going to look at your stuff and want to upgrade it.
• Tools. You'll need tools now, such as a drill and screwdrivers and whatnot. You're responsible for the upkeep on your home now.

Here's my suggestion. Take a walk down the isles at Home Depot and you'll get a sense of what you'll need as a home owner. Add up the things you think you'll need, and those are your hidden costs.

Remember that the first year of home ownership is the hardest, due to all the costs I've outlined, but it does get better.

Congrats on possibly taking the next step for you two, but please please don't do this if you can't afford it. If your budget is too tight, wait it out a year or two, pay down/off some things, and then try again. Trust me, it'll be FAR more expensive to have to move out of your home than if you waited a couple years.