What Are Closing Costs, Exactly?

• Closing costs are fees paid at the end of a real estate transaction, on top of your down payment

• They typically range from 2% to 5% of the loan amount

• On a $400,000 home, that's $8,000 to $20,000 in fees most buyers don't see coming

What's Typically Included

• Lender fees: origination, underwriting, and processing charges

• Third-party fees: appraisal, title search, title insurance, attorney fees

• Prepaid items: homeowners insurance, property taxes, and prepaid interest

• Government fees: recording fees and transfer taxes

What You Can Do to Lower Them

Some closing costs are negotiable. You can ask the seller to cover a portion (called a seller concession), shop around for title and escrow companies, and compare loan estimates from multiple lenders. First-time buyers in your area may also qualify for assistance programs that help cover these costs.

What to Ask Your Agent and Lender

• Request a Loan Estimate within 3 business days of applying. Lenders are required to provide it

• Compare the Loan Estimate to the Closing Disclosure you receive 3 days before closing

• Ask which fees are lender fees (negotiable) vs. third-party fees (less flexible)

• Ask about lender credits: paying a slightly higher rate in exchange for reduced closing costs

Ready to Buy?

Closing costs catch a lot of first-time buyers off guard. If you're planning to buy, your agent can walk you through what to expect and connect you with lenders who are upfront about fees. Reach out today to start the conversation.