Buying a home in Washington means budgeting for more than the mortgage payment. In addition to principal and interest, new homeowners may also need to plan for home insurance, PMI, property taxes, HOA fees, utilities, and ongoing maintenance or repair costs. Some of these expenses may be part of your monthly housing payment, while others arrive separately or show up unexpectedly, which is why they are easy to miss if you only focus on the loan payment.
In this post, we’ll walk through the new home expenses you’re likely to encounter as a new homeowner in Washington State and explain how to prepare for them before they affect your budget.
| Expense | When It Usually Appears | Commonly Escrowed or Paid Separately? | What to Verify Before Closing |
|---|---|---|---|
| Home insurance | Typically paid upfront at closing and then ongoing | Often escrowed, but can vary | How much the premium will be and whether it will be included in your monthly payment |
| Private mortgage insurance (PMI) | Usually monthly if required by the loan | Commonly part of the monthly mortgage payment | Whether your down payment triggers PMI and how long it may apply |
| Property taxes | Ongoing, often collected monthly for future tax bills | Often escrowed, but can vary | Estimated tax amount for the property and whether your lender will collect it in escrow |
| HOA fees | Usually monthly, though community billing can vary | Usually paid separately | The current dues, what they cover, and whether any additional community costs apply |
| Utilities | Usually monthly and may change by season | Usually paid separately | Which services you will pay directly and whether any are covered by an HOA |
| Home maintenance and repairs | Ongoing and unpredictable | Paid separately | The home’s condition, age of major systems, and how much you want to reserve for upkeep |
When you buy a home, you’ll definitely want to obtain home insurance. Home insurance protects you in the event that your home is burglarized, damaged or destroyed. This is one of those expenses which is rarely contemplated by new home owners.
The cost of home insurance will vary according to a variety of factors. In some cases, you may be able to obtain a lower cost if you bundle your home insurance with another type of insurance, such as auto insurance. In any case, you’ll want to prepare for this expense in advance so you aren’t unpleasantly surprised by it.
Not every Washington State home owner will need to obtain Private Mortgage Insurance, but those who put down less than 20% will usually be required to do so. As with home insurance, many new home owners do not plan ahead for the additional cost associated with PMI. When you buy your home, you’ll want to prepare for PMI, because this expense can be sizable.
This is another expense which is often neglected by new home owners. Property taxes are a matter of state taxation, typically assessed and imposed at the county level. In most cases, property taxes are imposed on an “ad valorem” basis, which means that the tax is based on the value of your home.
On an annual basis, property taxes can add up to many thousands of dollars, and so it’s imperative that you plan adequately for this expense. If you fail to pay your property taxes, the state can place a lien on your home, something which no home owner wants to deal with.
If you buy a condo in Washington State, you’ll need to pay HOA fees. HOA fees are given to cover various maintenance costs in common areas in a condo community, such as landscaping. HOA fees can vary widely. Everything depends on the particular condo community you choose.
Some condos will carry HOA fees in the range of $1,000 per month, or more, while others will be only several hundred dollars. Again, this fee isn’t often considered when people buy a condo, but it is something which should be accounted for in advance.
Utilities are another new home expense that buyers can easily underestimate. These costs can vary based on the size of the property, the location, the season, and the systems in the home. For example, your total utility bill may look different depending on whether you are paying for electricity, gas, water, sewer, trash, internet, or some combination of those services.
It’s also important to verify which utility costs you will pay directly after closing. In some cases, certain services may be partially covered by an HOA, while in others the owner is responsible for everything. If you are transitioning from a rental, this change can be easy to miss because costs that may once have been handled by a landlord can become your responsibility as the homeowner.
Another expense you’ll need to think about and prepare for is the expense associated with maintenance and repairs. When you buy a home, you’re the one who is responsible for taking care of your place. You’ll need to pay for regular maintenance and upkeep.
If something breaks, you’ll need to pay for the cost of the repair. If your faucet starts to leak, or your appliance breaks down, or your roof becomes faulty, you’ll need to absorb these costs. Make no mistake, maintenance and repairs can eat up thousands and thousands of dollars on an annual basis, and so you’ll need to seriously consider these costs when you buy a home.
The most practical way to prepare is to sort these costs into two groups: expenses that may be built into your mortgage payment and expenses that will likely arrive as separate bills. Before closing, ask your lender which items will be escrowed and which ones you will need to pay directly so you have a clearer picture of your true monthly housing cost.
You should also review any HOA dues carefully before you buy, especially if you are purchasing a condo or a home in a planned community. Make sure you understand the amount due, how often it is paid, and what it actually covers. Do the same with utilities by confirming which services are owner-paid and whether any are included through the HOA.
Finally, set aside money for maintenance and repairs in a separate reserve if possible. Unlike PMI or an HOA bill, repair costs do not always show up on a predictable schedule. Having funds dedicated to upkeep can make it easier to handle routine maintenance as well as the unexpected costs that come with owning a home.
Whether you’re buying a home in Tacoma, Bellevue, Seattle, or any other area of Washington State, you’ll want to be as prepared as you can be for the expenses which will inevitably follow.
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.
Some homeownership costs may be built into the monthly mortgage payment, especially principal, interest, PMI, and sometimes home insurance and property taxes if the lender escrows them. Other costs, such as HOA fees, utilities, and maintenance, are often paid separately.
They are often escrowed, but not always. Before closing, confirm with the lender whether property taxes and home insurance will be included in the monthly payment or paid separately.
No. PMI is usually required when the down payment is less than 20 percent. Buyers who meet the loan requirements to avoid PMI may not have that added monthly cost.
Ask how much the dues are, how often they are paid, what they cover, and whether there are any additional community costs. It is also important to verify whether any utilities or shared maintenance are included.
Verify which services the homeowner will pay directly, such as electricity, gas, water, sewer, trash, and internet. Also confirm whether any of those costs are partially covered by an HOA.
Review the home’s condition, the age of major systems, and how much you want to reserve for upkeep. Setting aside money in a separate maintenance fund can help with both routine upkeep and unexpected repairs.
Common costs include home insurance, PMI if required, property taxes, HOA fees, utilities, and ongoing maintenance or repairs. Some may be part of the housing payment, while others arrive as separate bills.
They can. Costs that may have been covered by a landlord in a rental can become the homeowner’s responsibility after closing, which is why it is important to confirm exactly which services will be owner-paid.
Unlike fixed monthly bills, repair costs do not always appear on a predictable schedule. Routine upkeep, appliance issues, plumbing leaks, or roof problems can create expenses that are easy to miss during the buying process.
Ask the lender which costs will be escrowed and which must be paid directly. Also review HOA dues carefully, confirm utility responsibilities, and keep a reserve for maintenance and repair expenses.
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