Closing Costs for Buyers — What You Pay and When
As a home buyer, you will pay closing costs in addition to your down payment. Understanding what each cost is — and which are estimates versus fixed amounts — helps you prepare and compare lenders.
What Buyers Typically Pay at Closing
| Cost Category | Typical Range | Fixed vs. Estimate |
|---|---|---|
| Lender Origination Fee | 0.5%–1.5% of loan | Estimate — varies by lender |
| Appraisal Fee | $400–$700 | Estimate — lender-ordered |
| Credit Report Fee | $30–$50 | Actual cost passed through |
| Title Insurance (lender's policy) | 0.1%–0.5% of loan | Estimate — varies by state/title company |
| Title Search / Examination | $150–$400 | Estimate |
| County Recording Fee | $75–$600 | Actual — county clerk's schedule |
| Transfer / Deed Tax (some states) | 0% – 1.425%+ of price | Fixed (statutory) — see state guide |
| Escrow / Settlement Fee | $300–$1,500 | Estimate — varies by provider |
| Prepaid Interest | Depends on closing date | Calculated from loan amount + rate |
| Homeowner's Insurance (prepaid) | First year premium | Your actual insurance cost |
| Property Tax Escrow | 2–3 months of taxes | Based on property's tax bill |
Ranges are industry estimates. Your lender's Loan Estimate is the binding source for lender fees. CFPB guide to closing fees.
Transfer Tax for Buyers (State Exceptions)
In most states, the seller pays the transfer tax. Buyers should be aware of these exceptions:
- New York: Buyers pay the mansion tax (1%–3.9% NYC tiered) on residential sales ≥$1M
- New York (mortgage): Buyers pay mortgage recording tax (1.8%–1.925% in NYC)
- Broward County, FL: Buyer customarily pays Documentary Stamp Tax by local custom
- Georgia: Buyers pay the Intangible Recording Tax on the mortgage note (0.3% of loan)
Use the closing costs calculator to see the full breakdown for your state.
Your Loan Estimate: The Binding Document
Your lender must provide a Loan Estimate (LE) within 3 business days of your mortgage application under TRID rules enforced by the CFPB. The LE itemizes:
- All lender fees (origination, underwriting, processing)
- Third-party fees the lender requires (appraisal, credit report)
- Title and escrow services estimates
- Prepaid items and escrow reserves
- Total estimated cash needed at closing
The Closing Disclosure (CD), provided at least 3 business days before closing, gives the final actual figures. If the CD differs materially from the LE for certain fee categories, your lender must give you a revised LE and you have a right to review it.
How to Reduce Buyer Closing Costs
- Shop lenders: Compare multiple Loan Estimates side by side — lender origination fees vary widely
- Negotiate seller concessions: Ask the seller to cover some of your closing costs, especially in slower markets
- Shop title and escrow: In most states you can choose your own title company — compare quotes
- Close at end of month: Reduces prepaid interest (you pay interest only from closing date to month-end)
- Ask about no-closing-cost options: Lender may offer to absorb fees in exchange for a slightly higher rate — run the math on break-even
← Use the Closing Costs Calculator | Closing costs for sellers | Who pays by state
Frequently Asked Questions
Buyer closing costs typically run 2%–4% of the purchase price, not counting the down payment. On a $350,000 home that means $7,000–$14,000. The largest variables are lender origination fees and title insurance, which together make up the bulk of buyer costs. Request a Loan Estimate from your lender within 3 business days of application for binding figures.
In most cases, no — closing costs cannot be rolled into a purchase mortgage. However, you can negotiate with the seller for a concession (seller pays some of your closing costs), or choose a "no-closing-cost mortgage" where the lender covers costs in exchange for a higher interest rate. Ask your lender about both options.
A Loan Estimate (LE) is a standardized 3-page document your lender must provide within 3 business days of a mortgage application under TRID rules. It itemizes all estimated closing costs, the interest rate, and loan terms. The LE is legally binding within certain tolerance limits — your actual Closing Disclosure cannot differ significantly from the LE for most fees.
It depends on the state. In New York, buyers pay the "mansion tax" (1%–3.9%) on residential sales of $1 million or more. In Broward County, Florida, buyers customarily pay the Documentary Stamp Tax. In most other states, the seller pays the transfer tax. Review your state and contract carefully.
Prepaid items are not fees but money collected at closing for future expenses: prepaid interest (interest from closing date to end of month), homeowner's insurance premium, property tax escrow (typically 2–3 months), and mortgage insurance if applicable. Prepaids can add $2,000–$5,000 to the cash needed at closing on top of the closing costs themselves.