Costs
Closing Costs
Fees and expenses you pay when finalizing a mortgage, typically ranging from 2% to 5% of the home's purchase price. Common closing costs include lender fees, title insurance, appraisal fees, attorney fees, and prepaid taxes and insurance. On a $350,000 home, closing costs might run $7,000 to $17,500. Some costs are negotiable, and sellers sometimes agree to cover a portion.
Why It Matters
Closing costs are the fees you pay on top of your down payment to finalize a home purchase. They typically run 2-5% of the loan amount — on a $300,000 loan, expect $6,000-$15,000. These cover lender fees (origination, underwriting), third-party services (appraisal, title search, title insurance), government fees (recording, transfer taxes), and prepaid items (property tax escrow, insurance).
Closing costs vary dramatically by state. Missouri averages about $2,100, while New York exceeds $12,000 — largely due to transfer taxes and mandatory attorney fees. Some fees are negotiable (lender origination, title insurance if you shop around), while others are fixed (recording fees, transfer taxes set by state law).
Real-World Example
On a $350,000 home with 10% down ($315,000 loan): Origination fee $1,575 (0.5%), appraisal $550, title search $300, title insurance $1,200, recording fees $150, transfer tax $700 (varies by state), escrow prepays $2,500. Total: approximately $7,000-$10,000.
Pro Tip
Ask the seller to cover 2-3% of closing costs as part of your offer — this is common and can save you thousands in cash at closing. Also shop title insurance separately from your lender's recommendation.