How much are closing costs on a house?

Closing costs typically range from 2-5% of the purchase price. On a $400,000 home, expect $8,000-$20,000. The exact amount depends on your location, lender, loan type, and whether you buy discount points.

Who pays closing costs — buyer or seller?

The buyer pays most closing costs (lender fees, title insurance, prepaid taxes/insurance). However, buyers can negotiate for the seller to pay a portion — called seller concessions. FHA allows up to 6%, conventional up to 3-6% depending on down payment.

Can I roll closing costs into my mortgage?

For purchases, closing costs generally must be paid upfront. For refinances, you can often roll them into the new loan balance. Some lenders offer no-closing-cost options but charge a higher interest rate to compensate.

What is the difference between Loan Estimate and Closing Disclosure?

The Loan Estimate is provided within 3 days of application and shows estimated costs. The Closing Disclosure comes at least 3 days before closing with final numbers. Most fees should match closely — significant increases require explanation.

Closing Costs Explained: What You'll Pay & How to Save

Closing costs typically add 2-5% to your home purchase price. Understand every fee, who pays what, and strategies to reduce or negotiate your closing costs.

What Are Closing Costs?

Closing costs are the fees and expenses you pay to finalize a mortgage — separate from your down payment. They cover services like the appraisal, title search, attorney fees, lender origination charges, and prepaid taxes and insurance. On a $400,000 home, expect $8,000-$20,000 in closing costs.

2-5%

Typical Range (% of Price)

$8K-$20K

On a $400K Home

$2,000+

Potential Savings by Shopping

3 Days

Before Close to Review

Breakdown of Closing Costs

Fee	Typical Cost	Paid To	Negotiable?
Loan Origination Fee	0.5-1% of loan	Lender	Yes — shop lenders
Appraisal	$400-$700	Appraiser	No
Title Insurance	$1,000-$3,000	Title company	Yes — shop title cos
Title Search	$200-$400	Title company	Somewhat
Attorney Fees	$500-$1,500	Attorney	Yes — required in some states
Recording Fees	$50-$250	County	No
Credit Report	$30-$50	Lender	No
Survey	$300-$600	Surveyor	Sometimes waived
Prepaid Interest	Varies	Lender	Timing-based
Escrow (Taxes/Insurance)	2-6 months prepaid	Escrow account	No
Homeowners Insurance	$1,000-$3,000/yr	Insurer	Yes — shop insurers
Discount Points	0-2% of loan	Lender	Optional — see mortgage points

How to Reduce Closing Costs

Money-Saving Strategies

Compare Loan Estimates from 3+ lenders — origination fees and rates vary significantly
Negotiate with the seller — ask for seller concessions (2-6% of price toward your closing costs)
Shop title insurance — you have the right to choose your title company in most states
Close at end of month — reduces prepaid interest charges
Ask about lender credits — accept a slightly higher rate in exchange for the lender paying closing costs
Skip discount points unless you plan to stay 7+ years
Use buyer assistance programs — many state programs cover closing costs