The Real Costs of Buying Your First Home (Beyond the Down

Published September 2026 · Rudy Flores

The down payment gets most of the attention, but it is one of several costs. Planning for all of them helps you make an offer with confidence and avoid a scramble at closing. The figures below are general, and your own numbers will depend on your loan and your property.

1. The down payment

Some loan programs allow a down payment as low as a few percent, and there are down payment assistance programs in California, such as those offered through CalHFA and local agencies. Eligibility varies, so ask a lender which programs you may qualify for.

2. Closing costs

Closing costs cover things like lender fees, title and escrow services, and prepaid items. Buyers often estimate them at roughly 2 to 5 percent of the purchase price, but the actual amount varies. Your lender will provide a detailed estimate. Sometimes sellers agree to contribute toward them as part of a negotiation.

3. Earnest money, inspections and appraisal

You will typically make a good-faith deposit when your offer is accepted, and pay for a home inspection and an appraisal along the way. These are usually due before closing, so plan the cash timing.

4. Property taxes

In California, property tax is generally about 1 percent of the assessed value plus local voter-approved charges. Ask to see the actual tax bill for homes you like, and remember that your own bill will usually be based on your purchase price.

5. Homeowners insurance and, in some cases, HOA dues

Insurance is required by lenders. If the home is in a community with an association, monthly dues are part of your housing cost, and lenders factor them into what you can borrow.

6. A cushion for the first year

Repairs, small upgrades, furniture and moving costs add up quickly. Many buyers set aside a cash reserve for the first year in the home.

How to put it together

Add up the monthly payment (loan, taxes, insurance, dues) and the cash you need up front (down payment, closing costs, deposits and reserves). Both numbers matter. If you would like help doing that math, Rudy and the Patti & Jeff McKelvey Team can walk you through it step by step, with no pressure.

Talk to a lender. Rates, loan programs and approvals come from lenders, not from websites or real estate agents. Talk to your own mortgage broker, or use our preferred lender, Point Mortgage Corporation (NMLS #231073), at (619) 475-4095. You are always free to choose any lender you like, and you can verify any lender’s license at nmlsconsumeraccess.org.

The Real Costs of Buying Your First Home (Beyond the Down Payment)