2026-09-14T00:00:00|6.968|0.023|6.274|0.035|6.725|-0.009|6.623|0.032||
Closing Costs Explained: What You'll Pay & How to Save
Closing costs typically add 2-5% to your home purchase price. Understand every fee, who pays what, and strategies to reduce or negotiate your closing costs.
What Are Closing Costs?
Closing costs are the fees and expenses you pay to finalize a mortgage — separate from your down payment. They cover services like the appraisal, title search, attorney fees, lender origination charges, and prepaid taxes and insurance. On a $400,000 home, expect $8,000-$20,000 in closing costs.
2-5%
Typical Range (% of Price)
$8K-$20K
On a $400K Home
$2,000+
Potential Savings by Shopping
3 Days
Before Close to Review
Breakdown of Closing Costs
| Fee | Typical Cost | Paid To | Negotiable? |
|---|---|---|---|
| Loan Origination Fee | 0.5–1% of loan | Lender | Yes — shop lenders |
| Appraisal | $400–$700 | Appraiser | No |
| Title Insurance | $1,000–$3,000 | Title company | Yes — shop title companies |
| Title Search | $200–$400 | Title company | Somewhat |
| Attorney Fees | $500–$1,500 | Attorney | Yes — required in some states |
| Recording Fees | $50–$250 | County | No |
| Credit Report | $30–$50 | Lender | No |
| Survey | $300–$600 | Surveyor | Sometimes waived |
| Prepaid Interest | Varies | Lender | Timing-based |
| Escrow (Taxes/Insurance) | 2–6 months prepaid | Escrow account | No |
| Homeowners Insurance | $1,000–$3,000/year | Insurer | Yes — shop insurers |
| Discount Points | 0–2% of loan | Lender | Optional — see mortgage points |
How to Reduce Closing Costs
Money-Saving Strategies
Compare Loan Estimates from 3+ lenders — origination fees and rates vary significantly
Negotiate with the seller — ask for seller concessions (2-6% of price toward your closing costs)
Shop title insurance — you have the right to choose your title company in most states
Close at end of month — reduces prepaid interest charges
Ask about lender credits — accept a slightly higher rate in exchange for the lender paying closing costs
Skip discount points unless you plan to stay 7+ years
Use buyer assistance programs — many state programs cover closing costs
Closing Costs Explained for Home Buyers
Official Government Resources
CFPB — Owning a Home
Consumer Financial Protection Bureau guide to buying a home,
comparing loan offers, and understanding closing.
HUD — Buying a Home
Department of Housing & Urban Development resources for
homebuyers, including FHA program information.
VA — Home Loans
Official VA home loan program information, eligibility, and
Certificate of Eligibility requests.
Freddie Mac — Rate Survey
Weekly Primary Mortgage Market Survey, a benchmark for national
average mortgage rates.
FHFA — Loan Limits
Federal Housing Finance Agency conforming loan limits by county,
updated annually.
IRS — Mortgage Interest Deduction
IRS guidance on deducting home mortgage interest, points, and
eligible mortgage-related expenses.
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