Mortgage Closing Costs: What to Expect

Closing costs are the fees you pay to finish a home loan. They're usually 2% to 5% of the loan amount, paid on top of your down payment.

What closing costs usually include

• Loan origination fee and underwriting fees
• Appraisal and credit report fees
• Title search, title insurance, and settlement or escrow fees
• Recording fees and transfer taxes, which vary by state
• Prepaid items such as homeowners insurance and property taxes held in escrow

How to lower them

Get a Loan Estimate from at least three lenders and compare the fee lines, not just the rate. You can ask the seller for a closing cost credit, which is common in slower markets. Some lenders also offer to cover part of the costs in exchange for a slightly higher rate. Ask whether that trade makes sense for how long you plan to keep the loan.

Check how much house you can afford