Home-Buying Expenses: Understanding All the Costs Involved

Buying a home is one of the most significant financial steps most people will take, and it’s easy to underestimate the numerous costs associated with it. Down payments, inspections, closing fees, and ongoing ownership expenses can surprise even experienced buyers.

At NuKey Realty & Property Management in Spokane, we help clients navigate every stage of the home-buying process, from the first showing to closing and beyond. Here’s what you should know about home-buying expenses to plan your budget with confidence.

Upfront Costs When Buying a Home

You’ve found your dream home, but before you move in, there are several initial costs to prepare for. These are one-time expenses due before or at closing.

1. Down Payment

Your down payment is the portion of the home’s price you pay upfront. It reduces how much you borrow and affects your monthly mortgage and interest costs.

Typical range: 3% to 20% of the purchase price
Example: A 10% down payment on a $400,000 home equals $40,000.

Different loan types require different minimums. FHA loans may require as little as 3.5% down, while VA and USDA loans can offer zero-down options for qualifying buyers.

2. Closing Costs

Closing costs cover the services that make your home purchase official. In the Spokane market, they generally run between 2% and 5% of the loan amount and include:

Loan origination and underwriting fees
Appraisal and inspection fees
Title search and insurance
Recording and transfer taxes
Prepaid interest and escrow fees

Some lenders offer “no closing cost” loans, but these usually raise your interest rate or roll the costs into the loan balance.

3. Reserves and Emergency Funds

Mortgage lenders prefer to see that you have sufficient funds in the bank after closing. They may require proof of two months’ mortgage payments in reserve to ensure you’re financially stable. Even if not required, it’s smart to keep a cushion for unexpected expenses, such as appliance repairs or maintenance after moving in.

4. Moving Expenses

Whether you rent a truck and move yourself or hire professionals, this cost adds up quickly. A local move in Spokane typically ranges from $800 to $2,000, while long-distance relocations can cost significantly more

Ongoing Costs of Homeownership

Once you have the keys, the real budgeting begins. These are the recurring expenses you’ll need to plan for each month and year.

1. Mortgage Payments

Your mortgage payment typically includes principal, interest, property taxes, and insurance (PITI). A fixed-rate mortgage keeps the principal and interest steady, but taxes and insurance can fluctuate over time.

2. Property Taxes

Property tax rates in Spokane County are based on your home’s assessed value. These are often paid monthly as part of your mortgage, but can also be paid directly to the county. Rising home values can lead to higher taxes later.

3. Homeowners Insurance

Most lenders require homeowners’ insurance to protect the property. Costs vary depending on your home’s size, age, and location, but expect to budget several hundred dollars per year. Review your policy annually to ensure you’re getting the best coverage and rate.

4. Private Mortgage Insurance (PMI)

If your down payment is under 20%, you’ll likely pay PMI until you build enough equity in the home. This protects the lender in case of default, but you can request removal once your loan-to-value ratio reaches 80%.

5. HOA Fees (if applicable)

If your home is in a managed community, you may have homeowners’ association (HOA) fees to cover amenities like lawn care, security, or shared facilities. Fees can range from modest monthly amounts to several hundred dollars, depending on the property type and location.

6. Maintenance and Repairs

Even a brand-new home needs upkeep. A good rule of thumb is to set aside 1% of your home’s value each year for maintenance and unexpected repairs. That means about $3,000 per year for a $300,000 home.

Common ongoing home maintenance costs include:

Lawn care and pest control
HVAC servicing
Roof and gutter cleaning
Plumbing and appliance repairs
Tree trimming and removal
Paint and siding maintenance

Are you looking to purchase a home in Spokane? Search our home listings!

Don’t Forget Utilities and Everyday Costs

Utilities can easily add several hundred dollars to your monthly expenses. These include

Water, sewer, and garbage
Gas and electricity
Internet and cable

Older or larger homes in Spokane often have higher energy costs, so ask the seller for a recent utility statement before making an offer.

How to Budget for Home Buying Expenses

Here’s a simple budgeting approach to help you plan realistically:

Estimate your total upfront costs. Add your down payment, closing costs, and moving expenses.
Review your monthly cash flow. Include mortgage, taxes, insurance, and utilities.
Build an emergency fund. Aim for at least three months of housing expenses in savings.
Plan for future maintenance. Start small; setting aside even $100 a month can build a solid repair fund.

By mapping out these numbers early, you’ll avoid surprises later and feel confident when you make your offer.

FAQ: Common Questions About Home Buying Expenses

Can I ask the seller to pay for some of my closing costs?

Yes! In many Spokane-area transactions, buyers negotiate for sellers to cover a portion of closing costs. Your NuKey Realty agent can help structure this request based on local market conditions.

How much do I need for a down payment?

While 20% is traditional, many buyers today purchase homes with far less. FHA, VA, and other loan programs make homeownership in Spokane more accessible with smaller down payments.

What about unexpected costs after closing?

Budget for routine maintenance and have an emergency fund. A leaky roof, broken appliance, or plumbing issue can easily cost several hundred dollars or more.

Do you need help finding a home in Spokane? Contact NuKey Realty today!

Home Ownership Is Better When You Prepare for the Expenses

Owning a home is an exciting milestone, but understanding all the home buying expenses ahead of time is key to enjoying it stress-free. The proper preparation helps you buy with confidence and avoid stretching your finances too thin.

If you’re planning to buy a home in Spokane or the surrounding communities, connect with NuKey Realty & Property Management. Our experienced agents can guide you through every step, from finding the right home to estimating your total costs, so you have no surprises on closing day.

NuKey Realty & Property Management