A breakdown of common closing costs when buying a home and how to estimate cash needed at closing.
Try the Mortgage CalculatorWhat are closing costs?
Closing costs are fees paid at settlement when you finalize your home purchase. They are separate from your down payment and typically range from 2% to 5% of the purchase price, though the exact amount depends on location, lender, and loan type.
Buyers should budget for closing costs in addition to the down payment. On a $400,000 home, expect roughly $8,000 to $20,000 in closing costs before move-in expenses.
Common closing cost items
Lender fees include origination, underwriting, and discount points if you buy down the rate. Third-party costs cover the appraisal, credit report, and title search. Title insurance protects against ownership disputes. Government recording fees file the deed and mortgage.
Prepaid items — property tax, homeowners insurance, and per-diem interest — are often collected at closing to fund your escrow account. These are not technically fees but still require cash at settlement.
Estimating your cash to close
Cash to close equals your down payment plus closing costs minus any seller credits or lender credits. Our calculator provides a closing cost estimate based on typical percentages for lender fees, title, appraisal, and prepaid items.
Request a Loan Estimate from your lender within three business days of applying — it itemizes expected costs. Compare estimates from multiple lenders; some fees are negotiable, and credits can offset closing costs in exchange for a slightly higher rate.
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