Closing Costs

Banking & Credit

Closing costs are fees paid at the close of a real estate transaction — typically 2-5% of the loan amount. They include lender origination fees (0.5-1%), appraisal ($400-$700), title insurance ($1,000-$3,000), recording fees, attorney fees, prepaid taxes and insurance, and the first year of homeowner's insurance. On a $400,000 home, expect $8,000-$20,000 in closing costs. Buyers can sometimes negotiate seller-paid closing costs (concessions) or roll them into the mortgage (at the cost of higher interest). Always demand the Loan Estimate within 3 days of application to comparison-shop lenders accurately.