A few days before closing day, a client called after receiving the final documents, surprised by the closing costs that were several thousand dollars higher than expected. After reviewing the loan origination fees, appraisal fees, title insurance, and escrow fees one by one, it became clear that these were additional items that needed to be prepared apart from the home price. This is a moment that many first-time homebuyers in Seattle experience at least once.

First, let's look at home prices in Seattle. In the past three months, the median sales price has fluctuated between $857,000 and $879,000. This is about 2 to 3 percent lower than a year ago, but rather than a sharp decline, it seems to be stabilizing as we approach the adjustment phase expected in late 2025 and early 2026.

When checking loan conditions at this price range, FHA loans can start with a down payment of 3.5 percent if the credit score is above 580. For conventional loans, first-time homebuyers or those with an area median income of 80 percent or less can start with 3 percent, while generally, 5 percent is commonly used. If the down payment is less than 20 percent, PMI will be added monthly, and if it is more than 20 percent, this cost disappears. Since closing costs need to be prepared separately from the down payment, it is important to carefully read the loan estimate that you will receive within a few days after applying for the loan.

Property taxes are another aspect that can be easily overlooked, just like closing costs. The effective tax rate in King County, where Seattle is located, is 0.836 percent. Based on a median home value of $811,200, the annual property tax is about $6,785, so for higher-priced properties in downtown Seattle, the actual burden will be greater. Washington State has no income tax, so it relies on property taxes for revenue, which can be unfamiliar for families coming from areas with income tax.

The interest rate situation should also be considered. According to Freddie Mac PMMS, as of July 2026, the average 30-year fixed mortgage rate is 6.6 percent, ranging from 6.55 to 6.72 percent. Since interest rates continue to fluctuate while preparing the down payment and closing costs, getting pre-approved in advance can help you set a more accurate budget.

School districts are also an important topic. In Seattle, there is a significant variation in assigned schools by neighborhood, so inquiries from Korean families often start with school districts. While it's good to refer to ratings from GreatSchools or Niche, boundaries change frequently, so it's necessary to verify the assigned school for the specific address before signing a contract.

Along with closing costs, the debt-to-income ratio, or DTI, also affects loan approval. If there are existing car loans or student loans, the monthly payments are included, so organizing these before pre-approval can help reduce unexpected surprises.

For families moving from other states, it's also important to consider whether there is an income tax in their previous area. It's worth noting again that Washington has no income tax but has a relatively high property tax burden.

Investors looking for rental income may find that the adjustment phase in Seattle is not a bad time to buy. However, it is difficult to predict definitively as the possibility of continued price declines cannot be ruled out.

If preparing for the down payment and closing costs feels burdensome, it may be worth looking into the Home Advantage program from the Washington State Housing Finance Commission. You can receive 4 to 5 percent of the total loan amount as a second mortgage at a 0 percent interest rate, and if your annual income is below $147,400 in King County, you may be eligible for up to $10,000 in additional assistance. The client who was surprised on the phone ultimately completed the closing smoothly thanks to this support and the emergency funds they had prepared in advance. Tax rates and support conditions may vary, so it is advisable to consult with a loan officer and an expert before finalizing any contracts.