Home Purchase Details
$
$
%
Estimated Closing Costs
Total Estimated Closing Costs
—
Loan Origination Fee (1%)—
Appraisal$500–$700
Title Insurance & Search—
Transfer Tax—
Attorney / Closing Fee$800–$1,500
Prepaid Interest (1 month)—
Homeowner's Insurance (1 year)—
Property Tax Escrow (3 months)—
Actual costs vary by lender, state, and county. Ask your lender for a Loan Estimate within 3 days of application — it lists all costs by law.
Understanding Home Buying Closing Costs
Closing costs are fees paid at the time of purchase, separate from your down payment. They typically total 2–5% of the loan amount for buyers, and 6–10% of the sale price for sellers (mostly from real estate commissions). Being surprised by closing costs is one of the most common mistakes first-time buyers make.
Buyer vs Seller Closing Costs
Buyers pay lender fees (origination, points, underwriting), third-party fees (appraisal, title search, inspection), government fees (recording, transfer taxes), and prepaid items (insurance, interest, escrow setup). Sellers pay real estate agent commissions (typically 2.5–3% per agent), transfer taxes, attorney fees, and any seller concessions.
How to Reduce Closing Costs
- Shop lenders and compare Loan Estimates — origination fees vary widely
- Ask the seller to pay some or all of your closing costs (seller concessions)
- Close at the end of the month to minimize prepaid interest
- Negotiate lender credits in exchange for a slightly higher rate
- Look into state and local first-time buyer assistance programs
Frequently Asked Questions
Can closing costs be rolled into the loan? ▼
Sometimes. On a conventional purchase loan, most closing costs cannot be rolled in — you need cash. However, some costs can be negotiated as lender credits (you accept a slightly higher rate in exchange for the lender covering some fees). On refinances, closing costs are often rolled into the new loan balance.
What is a Loan Estimate and how do I use it? ▼
By federal law, lenders must provide a standardized Loan Estimate within 3 business days of your application. It details every fee, the interest rate, monthly payment, and cash needed to close. Get estimates from at least 3 lenders and compare them side by side — focusing on the total cash to close and the APR, not just the interest rate.