Budget 2% to 5% of your loan amount for closing costs, and don't let anyone tell you a tighter number than that until you've got a real Loan Estimate in hand. On a $400,000 loan, that's $8,000 to $20,000 — due at the closing table, on top of your down payment, usually as a wire or cashier's check. The average buyer nationally paid $4,661 in closing costs on a purchase in 2025, according to LodeStar data cited by Bankrate — but that number is doing a lot of hiding, because it ranges from about $1,551 in South Dakota to $17,545 in Washington, D.C. depending on where you buy (as of August 2026).

If you read our piece on what else you need saved beyond the down payment, you already got the one-line version. This is the itemized version — every fee you'll actually see on a Closing Disclosure, who typically pays it, and where you have room to push back.

The four buckets your closing costs fall into

Every fee on your Closing Disclosure lands in one of four categories. Knowing which bucket a fee is in tells you whether it's negotiable, shoppable, or just a tax you have to pay.

1. Lender fees (the ones you can actually negotiate)

These are what the lender charges to originate and process your loan. LendingTree and Bankrate put typical ranges (as of August 2026) at:

FeeTypical cost
Origination fee0.5%–1% of loan amount
Underwriting feeOften bundled into origination, or $400–$900 separately
Application feeUp to $500
Credit report fee$50–$80
Discount points (optional)1% of loan amount buys roughly 0.25% off your rate

This is the bucket lenders compete on, which means it's the one worth shopping. LendingTree reports that nearly half of borrowers who compared multiple loan offers found meaningful savings — get at least three Loan Estimates before you pick a lender, not just one you liked the vibe of.

2. Third-party fees (some shoppable, some not)

These pay for the outside services that make sure the house is what it says it is and the title is clean. Rough ranges as of August 2026:

FeeTypical cost
Home appraisal$300–$500
Home inspection$300–$1,000 (often paid pre-closing, not at closing)
Title search~$200
Title insurance (lender's + owner's policies)0.5%–1% of purchase price
Property survey (if required)Varies, often $300–$600
Attorney fees (required in some states)Hourly or flat, varies widely
Flood determination$15–$25

Here's the part most buyers don't know: per the CFPB, you're legally allowed to shop for the services listed in Section C of page 2 of your Loan Estimate — which typically includes title insurance, survey, and pest inspection. Your lender has to give you a written list of providers, but you can also bring your own, as long as the lender agrees to work with them. Title insurance in particular can vary meaningfully by provider, and almost nobody shops it. That's free money left on the table.

3. Prepaid items and escrow (not really a "fee" — it's your money, early)

This bucket trips people up because it feels like a fee but it's actually you pre-funding accounts you'd owe anyway:

  • Homeowners insurance — typically one full year's premium paid upfront
  • Property tax proration — reimbursing the seller for taxes they already paid covering your future ownership period, plus initial escrow deposits
  • Prepaid interest — per-diem interest from your closing date to the end of that month
  • HOA dues/transfer fees — if applicable, sometimes hundreds to low thousands

None of this evaporates — it funds your escrow account or covers insurance you'd be paying regardless. But it's still cash you need on hand at closing, and it's often the single largest line item on the whole sheet, bigger than any individual lender fee.

4. Government fees (the one that varies most by where you live)

Who actually pays what

This is customary, not legal — everything here is negotiable in the purchase contract, and local norms vary by region:

  • Buyer typically pays: lender fees, appraisal, credit report, buyer's title insurance policy, homeowner's insurance, prepaid interest and escrow, recording fees for the mortgage
  • Seller typically pays: owner's title insurance policy (in many states), real estate commissions, prorated property taxes for their ownership period, and — depending on local custom — some or all of the transfer tax
  • Split or "depends": attorney fees, transfer taxes, escrow/closing company fees — these follow local convention more than any hard rule. Pennsylvania, for example, customarily splits transfer tax between buyer and seller, while other states default to seller-pays or buyer-pays depending on market conditions and who has leverage. Ask your agent or title company what's customary in your specific market before assuming either direction.

Getting the seller (or lender) to eat some of it

You have more leverage here than the sticker shock suggests:

  • Negotiate seller-paid closing costs into the offer. In a buyer's market, this is one of the more common concessions sellers grant instead of dropping price — worth asking for regardless of loan type. Concession limits vary by loan program: conventional loans generally cap seller contributions around 3%–9% of purchase price depending on your down payment and occupancy, FHA and USDA cap around 6%, and VA loans cap around 4% [figures approximate and vary by lender/LTV tier — confirm exact caps with your loan officer before relying on them].
  • Ask about a lender credit in exchange for a slightly higher rate — effectively financing your closing costs into the loan over time instead of paying cash upfront. Worth the math if you're cash-tight now and plan to refinance or move before the higher rate costs you more than you saved.
  • Look for closing cost assistance programs. These usually ride alongside down payment assistance (DPA) — state and local Housing Finance Authorities offer grants, forgivable second loans, or deferred-payment loans specifically for closing costs, typically for first-time buyers (often defined as anyone who hasn't owned in the past three years) under an area median income cap, sometimes requiring a homebuyer education course and a minimum credit score around 620–640. Many run first-come, first-served with limited annual funding, so apply early in your search, not after you're under contract.

The realistic number to budget

Skip the national average and build your own, because it's the only version that matters:

  1. Get a Loan Estimate from at least two or three lenders once you're seriously shopping — it's a standardized form, so comparing them is actually apples-to-apples.
  2. Ask your agent or a local title company what's customary in your specific state and county for who pays transfer tax and owner's title insurance — this single answer can swing your number by thousands.
  3. Budget on the higher end (4%–5%) if you're in a high-transfer-tax state, buying a higher-priced home, or your loan program requires mortgage insurance premiums paid at closing (FHA's upfront premium, for instance, adds 1.75% of the loan amount on top of everything else).
  4. Budget on the lower end (2%–3%) if you're in a no-transfer-tax state, negotiating seller concessions, or shopping title insurance aggressively.

Either way, don't let closing costs be the thing that blindsides you three days before closing when the Closing Disclosure lands in your inbox. The math isn't a secret — it's just scattered across a dozen line items nobody bundles into one honest number for you until now.

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