Quick Answer
Closing costs typically run 2%–5% of the loan — about $6,000–$15,000 on a $300,000 loan — paid at closing on top of your down payment. They cover lender fees (origination), third-party services (appraisal, title, settlement), and prepaid taxes and insurance for your escrow account. You can lower them by shopping lenders, asking for seller concessions, or taking a lender credit. Budget for closing costs separately — they don't build equity the way a down payment does.
The down payment gets all the attention, but closing costs catch many buyers off guard. They're the fees to finalize your loan, due the day you close — and they're real money on top of your down payment. Here's what they are and how to shrink them.
How much to expect
2%–5% of the loan. On a $300,000 loan that's roughly $6,000–$15,000, paid at closing — separate from and on top of your down payment.
What's in your closing costs
| Category | Typical items |
|---|---|
| Lender fees | Loan origination, underwriting, discount points |
| Third-party services | Appraisal, credit report, title search & insurance, survey |
| Settlement | Attorney or escrow/closing agent, recording fees |
| Prepaids & escrow | Prepaid property taxes, homeowners insurance, initial escrow |
Not the same as your down payment
Your down payment goes toward the price and builds equity. Closing costs are fees to finalize the loan and don't build equity. Budget for both: on a $350,000 home, that could be $70,000 down plus $6,000–$15,000 in closing costs.
How to lower closing costs
- Compare each lender's Loan Estimate line by line.
- Ask the seller for concessions toward your costs.
- Shop title insurance and other third-party services.
- Consider a lender credit, or a first-time buyer program that covers costs.
Plan your total cash-to-close with the mortgage calculator, save for it with the savings calculator, and see programs that help in first-time buyer programs.