How much are closing costs on a house?

Closing costs typically range from 2-5% of the purchase price. On a $300,000 home, expect $6,000-$15,000 in total closing costs including lender fees, title insurance, appraisal, and prepaid items.

Who pays closing costs, buyer or seller?

Both. Buyers typically pay 2-5% and sellers pay 6-10% (mostly real estate commissions). In buyer-friendly markets, sellers may agree to cover some of the buyer closing costs.

Can I negotiate closing costs?

Yes. Origination fees, application fees, and some third-party fees are negotiable. You can also ask for seller credits, choose a no-closing-cost loan option, or shop multiple lenders for better fees.

Cost Guide

7 min read

What Are Closing Costs? A Complete Breakdown

Closing costs are 2-5% of the purchase price and include lender fees, title insurance, appraisal, and prepaid taxes/insurance. On a $400K home, expect $8,000-$20,000. Here's every fee explained.

The Short Version

Closing costs are the fees you pay to finalize your mortgage — typically 2-5% of the home's purchase price. On a $300,000 home, that's $6,000 to $15,000 on top of your down payment.

The Complete Breakdown

Lender Fees

Origination fee (0.5-1%): The lender's charge for processing your loan. On a $300K loan, that's $1,500-$3,000.
Application fee ($300-500): Covers the cost of processing your application. Some lenders waive this.
Underwriting fee ($400-800): The cost of evaluating your loan application.
Credit report fee ($30-50): Pulling your credit from all three bureaus.

Third-Party Fees

Appraisal ($400-600): A professional assessment of the home's value. Required by the lender.
Home inspection ($300-500): Not technically a closing cost, but you should always get one.
Title search ($200-400): Verifying the property's ownership history.
Title insurance ($500-2,000): Protects against ownership disputes. Lender's policy is required; owner's policy is optional but recommended.
Survey ($300-500): Confirming property boundaries. Not always required.
Attorney fees ($500-1,500): Required in some states for closing.

Prepaid Items

Prepaid interest: Interest from your closing date to the end of that month.
Property tax escrow: 2-6 months of property taxes held in escrow.
Homeowner's insurance: First year's premium paid upfront, plus 2-3 months in escrow.

How to Reduce Closing Costs

Shop around. Get Loan Estimates from at least 3 lenders. Lender fees vary significantly.
Negotiate. Origination fees, application fees, and some third-party fees are negotiable.
Ask for seller credits. In buyer's markets, sellers may agree to pay 2-3% of closing costs.
Choose a no-closing-cost loan. The lender covers costs in exchange for a slightly higher rate. Good if you're not staying long.
Close at the end of the month. This minimizes prepaid interest.

Always compare the Loan Estimate (LE) to the Closing Disclosure (CD) you receive 3 days before closing. Some fees can increase, but many are capped by law.

The Bottom Line

Closing costs are a significant expense that catches many first-time buyers off guard. Budget for 3% of the purchase price as a starting estimate, and use our Closing Cost Estimator to get a detailed breakdown for your specific situation.