US Closing Costs: What to Expect When Buying a Home

When you're buying a home in the US, your closing costs can range from 2% to 5% of the purchase price—a number that shocks most first-time buyers. On a $350,000 home, that's $7,000 to $17,500 due at closing, on top of your down payment. The Consumer Financial Protection Bureau publishes detailed guidance on what you should expect, and understanding each line item means you won't face any surprises at the closing table. This guide breaks down exactly what closing costs are, which ones you can negotiate, and how to keep them as low as possible.

What Are Closing Costs?

Closing costs are the fees charged by lenders, third parties, and government agencies when you finalize your home purchase. They're separate from your down payment and the mortgage itself—they're the cost of transferring ownership and setting up your loan.

The Closing Disclosure is a standardized form you'll receive from your lender at least three business days before closing. It lists every fee. Most closing costs fall into two buckets: lender fees (things the mortgage company charges) and third-party fees (title company, appraisers, lawyers, etc.).

The typical range is 2–5% of the home price, but it varies wildly depending on:

Your loan type (conventional, FHA, VA, USDA)
Your down payment size (smaller down payments = higher costs)
Your credit score (better credit = lower fees)
Local and state requirements (some states require attorney involvement; others don't)
Whether you're paying discount points (optional, to lower your interest rate)

If you're considering an FHA loan as a first-time buyer, those have specific closing-cost considerations—our FHA guide breaks down how they differ from conventional loans.

Detailed Breakdown of Closing Costs

Here's what you'll see on your Closing Disclosure, with realistic ranges for a $350,000 home purchase:

Loan Origination Fee ($1,750–$3,500, typically 0.5–1% of loan) This is what the lender charges to create your loan. It covers underwriting, processing, and admin costs. Origination fees are often negotiable, especially if you have strong credit or a large down payment.

Credit Report Fee ($50–$300) The lender pulls your credit report(s). Most charge a small flat fee; some bundle it into the origination fee.

Appraisal Fee ($300–$500) An independent appraiser determines the home's market value. The lender requires this so they're not lending more than the home is worth. This fee is non-negotiable but occasionally waived for certain loan types (like VA loans on properties appraised within the last 90 days).

Title Search & Title Insurance ($500–$1,500 combined) Title search: a title company searches public records to confirm the seller actually owns the property and there are no liens, judgments, or claims against it (typically $100–$300).

Title insurance: protects you and your lender against future claims to the property. There are two types—owner's policy (protects you, optional but recommended) and lender's policy (required by the lender, typically $400–$1,000). The cost is often a one-time premium based on the loan amount.

Home Inspection ($300–$500) You hire a home inspector (before closing) to check for structural, electrical, plumbing, and HVAC issues. This isn't a lender requirement, but most buyers get one. Some sellers pay for this; it's negotiable.

Attorney Fees ($500–$1,500) In some states (especially the Northeast and Florida), a real estate attorney is required at closing to review documents and represent you. In others, it's optional. If your state doesn't require one, you can hire one anyway for peace of mind.

Recording Fees ($50–$200) Local government charges to record the new deed and mortgage in the public records. Amount depends on your county.

Survey Fee ($150–$400) A surveyor confirms the property boundaries match the legal description. Some lenders require this; some don't. It's often waived if the home was recently surveyed.

Underwriting Fee ($400–$900) The lender's underwriting team reviews your application, verifies your income and assets, and approves the loan. Charged by most lenders.

Processing/Document Preparation Fee ($300–$900) The lender's processing team prepares all the loan documents. Sometimes bundled with the origination fee.

Homeowners Insurance (First Year Prepaid) ($800–$2,500 depending on the home and insurer) You must buy homeowners insurance before closing. Your first year's premium (or sometimes first 6 months) is due at closing. This isn't a "fee"—it's an actual insurance cost you'd pay anyway.

Property Taxes (Prorated) ($200–$2,000+ depending on location and timing) Property taxes are often prorated between the seller and buyer. If the seller has already paid property taxes for the full year, you reimburse them for the portion of the year you own the home.

HOA Fees (If Applicable) ($100–$500) If the property is in a homeowners association, you may owe prepaid HOA fees or special assessments at closing.

Loan Discount Points (Optional) ($3,500–$7,000 per point) You can optionally pay discount points to lower your interest rate. Each point = 1% of the loan amount and typically reduces your rate by 0.25%. Not required, only if you want a lower rate.

PMI (Private Mortgage Insurance, if down payment < 20%) ($2,000–$6,000 upfront, typically added to loan balance) If you're putting down less than 20%, the lender requires PMI. You pay an upfront premium at closing (and ongoing monthly premiums for years until you hit 20% equity). This is why down payment size matters so much for total closing costs.

How to Estimate Your Closing Costs

The best way to understand your costs is to use a Loan Estimate. By federal law, the lender must provide a Loan Estimate within 3 business days of your application. It shows all projected closing costs and allows you to compare offers from multiple lenders.

Strategy: Apply to 3–5 lenders and compare their Loan Estimates side by side. Look not just at the interest rate, but at the total closing costs and annual percentage rate (APR), which bundles the rate and fees into one number. The APR is the number that matters most because it accounts for both interest and points.

Our mortgage calculator helps you model different scenarios, but for actual closing-cost estimates, you'll need to request Loan Estimates from lenders directly.

The Closing Disclosure arrives 3 business days before closing and shows the final costs. Compare it carefully to your Loan Estimate—some costs may have changed (though the lender is limited in how much most can increase).

Who Pays What? (And What You Can Negotiate)

In most transactions:

Buyer pays: appraisal, inspection, survey, origination fee, underwriting, processing, credit report, title insurance (lender's and owner's), homeowners insurance, property taxes, discount points, PMI
Seller pays: realtor commission (typically 5–6%, split between buyer's and seller's agents—though this is increasingly negotiable post-2024), and sometimes the buyer's loan-related costs if negotiated as a concession

What you can negotiate:

Lender fees — some are fixed by regulation; others (origination, discount points, processing) are negotiable. Shop around.
Title insurance — rates are set by state, but you can shop for the title company.
Home inspection — can be paid by the seller as a concession during the offer phase.
Attorney fees — if your state allows it, compare quotes.
Realtor commission — increasingly negotiable, though the market is shifting. Have this conversation early.
Credits from the seller — during negotiation, you can ask the seller to pay some or all of your closing costs. This is common in buyer's markets (when inventory is high).

Common Closing Cost Mistakes

Shopping by rate alone. A lender advertising 4.2% with $5,000 in fees costs more than 4.5% with $1,000 in fees if you're keeping the mortgage for 5+ years. Compare APR and total closing costs, not just the rate. Our guide to comparing mortgage offers walks through the math.

Not reviewing the Closing Disclosure in advance. You get it 3 days before closing. If anything surprises you—or doesn't match your Loan Estimate—you have time to ask questions before you show up to sign.

Skipping the walk-through. The day before closing (or the morning of), do a final walkthrough to confirm agreed-upon repairs are done, agreed-upon items (appliances, fixtures) are still there, and the property is in the expected condition.

Forgetting about ongoing costs. Closing costs are one-time, but don't forget the monthly burden: mortgage payments, property taxes (usually $100–$500/month depending on location), homeowners insurance ($75–$200/month), HOA fees (if applicable), and maintenance and repairs. Our budget guide helps you stress-test whether you can actually afford the home beyond the down payment and closing costs.

Assuming the seller won't negotiate closing-cost credits. In a buyer's market, it's very common to ask the seller to cover some or all of your closing costs as part of the negotiation. Worst they can say is no.

Overlooking the full cost of closing. Yes, closing costs are an upfront expense, but they also factor into the long-term cost of homeownership. Some of these costs (origination fees, points) are interest-related and affect your APR; others (title insurance, inspection) are one-time. Our mortgage fee guide explains which closing costs are truly "hidden" and how they compound.

Frequently Asked Questions

Q: Can I roll closing costs into my mortgage? A: Sometimes. You can ask the lender to roll some costs into the loan balance, but this increases your total interest paid over the life of the loan. It's usually only worth it if you'd otherwise run out of liquid cash at closing. Use the mortgage calculator to compare scenarios.

Q: Are closing costs tax-deductible? A: Most closing costs are not deductible, but a few are. Discount points (if you're financing them) may be deductible in some cases. Consult a tax professional or the IRS guidance on mortgage interest and property taxes for your specific situation.

Q: What if closing costs are higher than my Loan Estimate? A: By federal law, the lender can't increase most fees beyond the amounts on your Loan Estimate (with a few exceptions like taxes, insurance, and HOA fees, which can change). If you see a significant increase on your Closing Disclosure, contact the lender immediately and ask for clarification or a refund.

Q: Do I need a lawyer at closing? A: It depends on your state. Some states (New York, Florida, parts of the Northeast) require a real estate attorney. Others don't. Even if not required, hiring one for $500–$1,000 can give you peace of mind if you're a first-time buyer and want someone to explain everything before you sign.

Q: Can the seller pay my closing costs? A: Yes. During the offer phase, you can ask the seller to cover your closing costs as part of the deal (or offer price). This is more common in buyer's markets. The seller's lender and your lender may have limits on how much the seller can contribute.

Q: What's the difference between Loan Estimate and Closing Disclosure? A: The Loan Estimate is provided within 3 business days of your application and shows projected costs. The Closing Disclosure is provided 3 days before closing and shows final costs. Most items shouldn't change between the two, but always compare them carefully.

Q: Should I get an owner's title insurance policy? A: Title insurance is required by your lender (lender's policy), but owner's policy is optional. For a one-time premium of $400–$1,000, it protects you (not the lender) against future claims to the property. Most title companies recommend it; many buyers consider it worth the peace of mind.

Q: How much should I budget for closing costs if I'm a first-time buyer? A: Budget 2–5% of the purchase price as a safe range. For a $350,000 home, that's $7,000–$17,500. Ask your lender for a Loan Estimate early so you know the exact range for your specific loan. If you're new to all this, our first-time buyer guide covers the whole journey from pre-approval to keys in hand.

Next Steps

Closing costs are a significant expense, but they're also largely knowable—you get a Loan Estimate and Closing Disclosure that spell everything out. The key is to:

Shop around — get Loan Estimates from at least 3 lenders and compare APR and total closing costs.
Negotiate — ask the seller for closing-cost credits, especially in a buyer's market.
Review carefully — don't skip the Closing Disclosure or final walkthrough.
Stress-test your budget — make sure you can afford the home, not just the down payment and closing costs.

If you're a first-time buyer, our first-time buyer mortgage guide walks through the entire process. And if you're comparing loan types (conventional vs. FHA), our FHA loans guide explains how FHA loans can lower your upfront costs—though with the tradeoff of PMI.

Use our mortgage calculator to model different scenarios and see how changes in rate, down payment, and term affect your total monthly cost.