What Are Typical Closing Costs?

When you are buying a home you generally pay all of the costs associated with that transaction. However, depending on the purchase agreement or what you negotiate, the seller may end up paying for some of these costs. Typically, closing costs (not including your down payment) range from 1.5-3% of the home purchase price.

Even if you don’t pay the mortgage closing fees directly out of pocket, you might end up paying them indirectly. Sometimes, you can negotiate with the seller for a closing cost contribution towards your closing costs.

The lender may also offer to give you a credit to help with your closing costs. This credit isn’t free either. Typically, the lender will either increase your loan amount to cover these costs or charge you a higher interest rate in exchange for the credit.

Common closing fees or charges may include:

• Mortgage fees
• Appraisal fees
• Title insurance
• Recording fees and taxes
• Prepaid expenses such as property taxes, homeowner’s insurance, and interest until your first payment is due
• And others…

 

Be sure to review multiple Loan Estimates from multiple lenders to make sure you are getting the lowest rates and fees available. Remember, these fees often vary from lender to lender and some of them are fixed, while others are negotiable. Be sure to address this with your lenders.