๐ What Are Closing Costs?
Closing costs are the fees paid at the end of a real estate transaction โ typically 2โ5% of the home price. Buyers usually pay most of them, but sellers contribute a share (especially in buyer's markets).
๐ต Typical US Closing Costs
| Lender origination fee | 0.5โ1% of loan |
| Appraisal | $400โ$700 |
| Home inspection | $300โ$600 |
| Title insurance | $500โ$2,000 |
| Title search & recording | $200โ$500 |
| Attorney / closing agent | $500โ$1,500 |
| Prepaid interest (30 days) | ~$500โ$1,500 |
| Escrow (taxes + insurance) | 3โ6 months |
| HOA transfer fees | $100โ$1,000 |
๐ก How to Reduce Closing Costs
- Negotiate seller concessions (2โ3% is common in slow markets)
- Compare Loan Estimates from 3+ lenders โ fees vary 20%+
- Ask your lender to waive the origination fee
- Time your closing for the end of the month (less prepaid interest)
- Use lender credits in exchange for a slightly higher rate
๐
The 3-Day Rule
Lenders must give you a Closing Disclosure at least 3 business days before closing. Compare it to your original Loan Estimate โ if fees jumped, ask why in writing.