Closing Costs: What to Expect and How Much to Budget

Average Closing Costs

Closing costs typically run 2-5% of the loan amount. On a $350K home with 5% down, expect $6,600-$16,600 in closing costs.

What Is Included

Lender fees: Origination fee (0.5-1%), underwriting, processing
Third party: Appraisal ($300-$600), title search, title insurance, attorney fees
Prepaid items: First year homeowners insurance, property tax escrow, prepaid interest

Ways to Reduce

1. Negotiate seller concessions (seller pays your closing costs)
2. Shop multiple lenders (fees vary significantly)
3. Ask about lender credits (higher rate in exchange for lower fees)
4. Look into first-time buyer grants