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Closing Costs Explained: What You'll Pay at Closing

Updated February 2026 • 9 min read

Closing costs are fees paid when finalizing your mortgage, typically 2-5% of the home price. On a $350,000 home, that's $7,000-$17,500. Knowing what to expect helps you budget accurately.

Common Closing Costs

Loan Origination Fee

Lender's fee for processing the loan

0.5-1% of loan

Appraisal Fee

Professional property valuation

$300-$500

Title Insurance

Protects against title defects

$1,000-$3,000

Title Search

Research of property records

$200-$400

Attorney Fees

Legal review (required in some states)

$500-$1,500

Recording Fee

Government fee to record the deed

$50-$250

Credit Report Fee

Cost to pull your credit reports

$25-$50

Survey Fee

Property boundary verification

$300-$500

Prepaid Expenses

These aren't technically closing costs, but you'll need to pay them at closing:

Property Taxes

3-6 months upfront, depending on when taxes are due

Varies

Homeowner's Insurance

First year premium + 2-3 months reserves

$1,000-$2,500

Mortgage Interest

Interest from closing date to end of month

Varies

PMI/MIP Upfront

Upfront mortgage insurance (FHA, low-down conventional)

1-2% of loan

Example: $350,000 Home Purchase

Home Price$350,000
Down Payment (10%)$35,000
Loan Amount$315,000
Closing Costs$9,500
Loan Fees$2,500
Title & Escrow$3,000
Prepaid Items$4,000
Total Cash Needed$44,500

Ways to Reduce Closing Costs

  • 1

    Shop lenders — Compare Loan Estimates from at least 3 lenders

  • 2

    Negotiate — Some fees are negotiable (origination, processing)

  • 3

    Seller credits — Ask seller to cover some closing costs

  • 4

    Lender credits — Accept slightly higher rate for lower fees

  • 5

    Close at end of month — Reduces prepaid interest

Calculate your total cash needed

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