Are you thinking of buying a home in WA some time soon? If so, there are costs you need to consider beyond just your down payment and future monthly mortgage payment. Buyers often lump every upfront expense into “closing costs,” but some charges are paid before closing, some are due at closing, and some may continue after you get the keys.
If you’re in the process of buying a home, you probably have your deposit and monthly mortgage charges in a spreadsheet, along with a chart of your other expenses and your monthly income. But when it comes to buying a home in WA, there are lots of different costs that will come into play – and it’s easy to forget something.
This guide will help you budget more accurately by separating the expenses that can show up before closing, at closing, and as part of your ongoing housing costs.
Not every expense tied to a home purchase is handled the same way. Some items, such as a home inspection, are often paid before closing as part of your due diligence. Other charges, such as lender fees, title-related charges, prepaid insurance, and tax reserves, are commonly collected at closing as part of your cash to close. Still others may affect your budget after closing, such as mortgage insurance that is built into your monthly payment depending on your loan structure.
Using this framework can help you avoid treating inspection fees, prepaid escrow items, and mortgage insurance as one single bucket when you estimate how much cash you’ll need.
Most home purchase agreements are contingent upon a successful home inspection – and if you’re planning to buy a home, you should definitely have it inspected before you buy it. However, home inspectors don’t work for free, and you’ll have to pay a home inspector for a thorough evaluation of the premises.
Home inspection fees depend on the kind of property you’re buying, and can vary depending on your location. In general, condo inspections may cost less than inspections for single-family homes, while larger or more complex properties may cost more.
If the seller already paid for property taxes, HOA fees, or utility bills for the rest of the year or past the closing date, adjustments will have to be made. The seller will need to be reimbursed for payments made that extend beyond closing, and rightfully so. That means you, as the buyer and new owner of the property, will have to cover the cost of these payments in the form of adjustments.
Another buyer-paid closing cost category to keep in mind is prepaid homeowner’s insurance and property tax reserves. These amounts are often collected at closing and set aside as part of the overall funds needed to complete the purchase.
Buyers must pay for title insurance, which is important as this type of policy protects you from any potential issues with the title of the property. In some cases, sellers may not be legally allowed to sell the property. In others, there may be liens on title that will need to be cleared before you take possession. Title insurance can protect you from these issues, but there is a cost associated with such insurance, which is typically a few hundred dollars.
Escrow and recording fees are another closing cost category that buyers should remember when budgeting for a home purchase. These fees are commonly included alongside other transaction-related costs at closing and can add to the total amount due.
Private mortgage insurance, or PMI, is not a universal closing cost. With a conventional loan, PMI is usually required when the buyer makes a down payment of less than 20% of the home’s value. When you put 20% down on a conventional loan, PMI is generally not required.
For budgeting purposes, the important point is that mortgage insurance can show up in different ways depending on the loan structure and product type. In some cases, it may increase the cash you need upfront. In others, it may be added to your monthly mortgage payment instead. That means buyers should plan for it as part of total affordability rather than assuming it always appears as a standard closing line item in the same way as title or lender fees.
One category of closing costs that buyers often forget is lender fees. Lender fees are fees that your mortgage lender will charge for processing the transaction of the loan. These can include appraisal fees, credit report fees, processing and application fees, and administration fees for underwriting.
These charges vary by lender and loan type, and mortgage closing costs can add up quickly. The Consumer Financial Protection Bureau reported that mortgage closing costs rose to $5,954, so buyers should review their loan estimates carefully and budget for substantial upfront costs.
Before closing, take time to compare your Closing Disclosure with your Loan Estimate. The Closing Disclosure is the statement of your final loan terms and closing costs, so it is one of the most practical tools you have for verifying what you are actually being asked to pay.
As you review your documents, confirm whether inspection-related costs were already paid outside closing, whether title, escrow, and recording charges match what you expected, and whether lender fees, prepaid homeowner’s insurance, and property tax reserves are clearly identified. Also check whether any seller-paid credits are being applied to reduce your out-of-pocket amount due at closing.
Because charges can vary by lender, title company, county, and transaction terms, Washington buyers should use these documents to confirm the actual breakdown instead of assuming every fee will be handled the same way in every purchase. If you want a rough planning range ahead of time, tools such as Fannie Mae’s closing costs calculator can help you estimate common categories before you receive final numbers.
Buying a house is a major undertaking, and there are lots of ways that the process could go awry. But a good mortgage professional can help you navigate the process and get the home and the mortgage you’ve always wanted without any issues. Contact your trusted mortgage expert to learn more.
Sammamish Mortgage can help. We serve clients across Washington, Idaho, Colorado, Oregon, and California. Since 1992, we’ve been providing several mortgage programs and products with flexible qualification criteria to borrowers across the Pacific Northwest. Visit our website to get an instant rate quote or to use our online mortgage calculator. Or, reach out to us if you are ready to get pre-approved for a mortgage.
Closing costs are the fees and prepaid expenses due when a home purchase is finalized. In Washington, they can include lender fees, title insurance, home inspection costs, adjustments, and mortgage insurance in some cases.
Home inspection fees are commonly paid during the home buying process and should be included in a buyer’s budget. The cost depends on the property type, size, and location.
Inspection costs vary by property. Condo inspections are often lower, single-family homes usually cost more, and luxury properties can cost significantly more because they require a more detailed review.
Adjustments are reimbursements to the seller for expenses already paid beyond the closing date, such as property taxes, HOA dues, or utility charges.
Buyers pay adjustments because they become responsible for the property after closing. If the seller prepaid certain costs for a period that extends past closing, the buyer reimburses the seller for that portion.
Title insurance is typically part of the transaction and is an important protection for buyers. It helps cover certain title issues, such as liens, ownership disputes, or other problems affecting the property title.
Title insurance helps protect against covered title defects, including undisclosed liens, ownership claims, and other issues that could affect a buyer’s legal rights to the property.
Private mortgage insurance is generally required when a conventional loan has a down payment of less than 20%. It protects the lender if the borrower defaults on the loan.
Private mortgage insurance may be paid as part of the monthly mortgage payment or through a larger upfront payment, depending on the loan structure and lender options.
Lender fees can include appraisal fees, credit report charges, application or processing fees, and underwriting or administrative costs. These charges vary by lender and should be reviewed carefully before closing.
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