What Is Closing Costs?

Closing costs are the fees and expenses you pay when finalizing a mortgage, typically ranging from 2% to 5% of your loan amount. They include charges for the appraisal, title search, title insurance, origination fee, recording fees, and prepaid items like homeowners insurance and property taxes. Your lender is required to provide a Loan Estimate within three business days of your application so you can compare costs.

On a $350,000 loan, you can expect closing costs between $7,000 and $17,500. A typical breakdown might include a $500 appraisal fee, $1,500 title insurance, $1,750 origination fee (0.5%), $3,000 in prepaid taxes and insurance, and $1,500–$2,000 in government recording and miscellaneous fees. Sellers can sometimes contribute toward your closing costs—up to 3%–6% of the sale price depending on the loan type.

Key Facts

• Typical range: 2%–5% of the loan amount
• Loan Estimate timing: Provided within 3 business days of application
• Closing Disclosure timing: Received at least 3 business days before closing
• Seller concessions: Up to 3% (conventional with <10% down) to 6% (FHA/VA) of the purchase price

Frequently Asked Questions

Can you roll closing costs into your mortgage?

In some cases, yes. VA and USDA loans allow you to finance certain closing costs into the loan. With conventional and FHA loans, you can negotiate a higher interest rate in exchange for a lender credit that covers some or all of your costs—this is called a no-closing-cost mortgage.

Are closing costs negotiable?

Many closing costs are negotiable. You can shop for third-party services like title insurance and home inspection. Lender fees such as the origination fee may also be negotiable. Always compare Loan Estimates from at least 2–3 lenders to find the best deal.