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How Much Are Closing Costs?

By Sari R. Updated on 6/1/2015

When you're buying a home, you are inevitably going to have to pay closing costs. As a general rule of thumb, closing costs represent between 2-5% of the home's purchase price. This will depend for each individual circumstance, but this is generally something that holds true. Here's what you are paying for when you pay for closing costs:


  • Loan Origination Fee
  • Survey Fee
  • Appraisal Fee
  • Discount Points 
  • Pest Inspection Fee
  • Recording Fee
  • Escrow Deposit
  • Underwriting Fee
  • Title Search Fees
  • Title Insurance
  • Inspection Charges
  • Attorney Fee
  • Credit Report Fee

How Will I Know How Much to Budget?

Within 72 hours of your applying for a loan, your lender is legally obligated to provide you with a GFE (good faith estimate). The good faith estimate will go into detail exactly what the lender thinks you will owe in terms of closing costs. However, because this is an estimate, these numbers are legally allowed to change as much as 10% from the original estimate. When you budget, take your GFE into consideration and add 10% to the final amount so you aren't surprised by any added costs. When you close on your home, your lender will give you a HUD-1 statement that outlines the final closing costs.

Are Closing Costs Negotiable?

Sometimes, closing costs are negotiable. You should compare your GFE with your HUD-1 settlement statement and ask your lender about any considerable price differences. You can usually negotiate the cost of administrative fees down, and other items may also be able to be negotiated.

Can I Avoid Closing Costs?

You can't avoid them completely, but you can avoid paying them upfront by applying for a no-closing cost mortgage. This means you won't pay any of the closing costs when you close on the mortgage, but they will be "rolled in" to the loan itself.

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About The Author:
Sari R.
Sari R. is a mortgage editor for Lender411com. She graduated with a Bachelor's Degree in Screenwriting and Public Relations/Advertising from Chapman University. She can be reached at sarelyn@lender411com.

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