Closing Costs Explained: What to Expect and How to Reduce Them

Closing costs are the fees that finalize your mortgage — and they often surprise first-time buyers. Nationally, closing costs typically run 2% to 5% of the loan amount. On a $350,000 loan, that’s $7,000 to $17,500 due at the closing table.

Common line items include:

• Lender origination and underwriting fees
• Appraisal and credit report fees
• Title insurance and title search
• Recording fees and transfer taxes
• Prepaid property taxes, homeowners insurance, and mortgage interest

Ways to bring the number down:

1. Compare Loan Estimates from at least three lenders — fees vary more than most buyers realize
2. Negotiate seller concessions, where the seller covers part of your closing costs
3. Ask about lender credits, which reduce upfront costs in exchange for a slightly higher rate
4. Check for first-time buyer assistance programs in your state or county

Closing costs aren’t optional, but they are negotiable. A little comparison shopping and a careful read of your Loan Estimate can save thousands before you even get to the keys.