Closing Costs Explained: What Homebuyers Pay at the Table

Closing costs are the fees you pay to finalize your mortgage, and they're easy to underestimate. Budgeting for them up front keeps your home purchase on track.

What's typically included

• Loan origination and underwriting fees.
• Appraisal and credit-report fees.
• Title search, title insurance, and escrow fees.
• Prepaid property taxes and homeowners insurance.
• Recording fees and, in some areas, transfer taxes.

How much to expect

Closing costs generally run 2–5% of the loan amount. On a $280,000 loan, that's roughly $5,600 to $14,000 — separate from your down payment. Your lender must provide a Loan Estimate early in the process and a Closing Disclosure before signing; compare them carefully.

Ways to reduce them

• Shop multiple lenders and compare their Loan Estimates line by line.
• Ask the seller to contribute toward closing costs (seller concessions).
• Look into lender credits, though they usually come with a slightly higher rate.
• Check for first-time buyer and down-payment-assistance programs.

Factor closing costs into your overall budget alongside the monthly payment — our affordability calculator helps you keep the full picture in view.