Closing costs typically run 2–5% of the home's purchase price, paid at the closing table. On a $350,000 home, budget $7,000–$17,500. The biggest line items are loan origination fees (0.5–1%), title insurance ($500–$3,500), and prepaid property taxes and insurance. Sellers sometimes cover part of them — negotiate.
Closing costs are the collection of fees paid to finalize a real estate transaction. They are separate from your down payment and due on closing day. Many first-time buyers plan for the down payment but forget to budget for closing costs — then scramble to cover a five-figure check at the last minute.
What Is Included in Closing Costs?
- •Loan origination fee: 0.5–1% of the loan — paid to the lender for processing your mortgage
- •Appraisal: $300–$700 — required by the lender to confirm the home's market value
- •Title search and title insurance: $500–$3,500 — protects against ownership disputes
- •Escrow or attorney fee: $500–$1,500 — for the closing agent who manages the transaction
- •Recording fees: $50–$250 — paid to the county to record the deed transfer
- •Prepaid interest: depends on close date — interest from closing day to the end of the month
- •Homeowner's insurance (first year): $800–$2,500 depending on property and location
- •Property tax escrow: 2–6 months of taxes upfront into an escrow account
- •Private mortgage insurance (PMI) setup: if down payment is under 20%
- •Survey fee (sometimes): $300–$700 to confirm property boundaries
Closing Cost Estimates by Home Price
- •$200,000 home → $4,000–$10,000 in closing costs
- •$300,000 home → $6,000–$15,000
- •$400,000 home → $8,000–$20,000
- •$500,000 home → $10,000–$25,000
- •$750,000 home → $15,000–$37,500
Estimate Your Full Home Buying Costs
Who Pays Closing Costs — Buyer or Seller?
Buyers pay most closing costs — specifically all lender-related fees. Sellers typically pay the real estate agent commissions (3–6% of the sale price) plus their share of property taxes and title transfer fees. However, in a buyer's market, sellers often agree to pay a portion of the buyer's closing costs as a concession — sometimes $5,000–$15,000.
How to Reduce Your Closing Costs
- 1.Request seller concessions — ask the seller to cover 2–3% of closing costs in your offer, especially on homes that have sat on the market
- 2.Shop lenders — origination fees and points vary significantly; get at least three Loan Estimates and compare the "Section A" fees
- 3.Close at the end of the month — you owe prepaid interest only from closing day through month end; closing on the 28th vs. the 1st saves nearly a full month of interest
- 4.Use a lender credit — accept a slightly higher interest rate in exchange for the lender covering some closing costs; useful if you plan to sell or refinance within 5 years
- 5.Negotiate title insurance — in states that allow it, you can shop for your own title company; in others, use the seller's existing policy (reissue rate is 30–40% cheaper)
- 6.Ask what's negotiable — appraisal, survey, and attorney fees are sometimes waivable or negotiable depending on lender and state
You will receive a Loan Estimate within 3 business days of applying — this document breaks down every closing cost by category. Compare Section A (origination charges) across lenders; Section B/C fees are generally fixed. The Closing Disclosure, sent 3 days before closing, must match the Loan Estimate closely.