US Mortgage Closing Costs Guide: Fees, Negotiation & Savings Tips 2025
Complete breakdown of US mortgage closing costs including lender fees, third-party fees, and strategies to reduce your closing costs and save money.
Understanding US Mortgage Closing Costs
Closing costs are fees paid at the end of the home buying process. Understanding these costs helps you budget properly and potentially save thousands of dollars.
Typical Closing Cost Range
National Average: 2-5% of home price
$300,000 Home: $6,000 - $15,000
$500,000 Home: $10,000 - $25,000
$750,000 Home: $15,000 - $37,500
Lender Fees
Origination Fee: 0.5% - 1% of loan amount
Application Fee: $200 - $500
Processing Fee: $200 - $800
Underwriting Fee: $200 - $800
Points: 1 point = 1% of loan amount (optional)
Rate Lock Fee: $0 - $500
Third-Party Fees
Appraisal Fee: $300 - $600
Home Inspection: $300 - $500
Title Search: $200 - $400
Title Insurance: $500 - $2,000
Survey: $200 - $500
Flood Certificate: $15 - $25
Credit Report: $25 - $50
Government Fees
Recording Fee: $50 - $200
Transfer Tax: Varies by state (0.1% - 2% of home price)
Notary Fee: $50 - $200
Courier Fee: $25 - $50
Prepaid Items
Property Taxes: Prorated amount
Homeowners Insurance: First year premium
Mortgage Insurance: If required
Interest: From closing date to first payment
Escrow Account: 2-3 months of taxes and insurance
Ways to Reduce Closing Costs
Shop Around: Compare fees from multiple lenders
Negotiate Fees: Many fees are negotiable
Ask for Credits: Lender may offer closing cost credits
Seller Concessions: Ask seller to pay some costs
No-Cost Refinancing: Roll costs into loan (increases rate)
Compare Loan Estimates: Use to negotiate better terms
Closing Cost Assistance Programs
State Programs: Many states offer closing cost assistance
Local Programs: Cities and counties may have programs
Employer Programs: Some employers offer assistance
Non-Profit Organizations: Various groups provide help
Lender Programs: Some lenders offer assistance
Understanding the Loan Estimate
Section A: Origination charges
Section B: Services you cannot shop for
Section C: Services you can shop for
Section D: Other costs
Section E: Total loan costs
Section F: Prepaid costs
Section G: Initial escrow payment
Section H: Other costs
Section I: Total closing costs
Comparing Loan Estimates
Focus on Total Costs: Don't just compare interest rates
Check Each Section: Look for differences in fees
Ask Questions: Understand what each fee covers
Negotiate: Use estimates to negotiate better terms
Closing Cost Calculator
Use our calculator to estimate:
- Total closing costs for your home price
- Monthly payment impact of rolling costs into loan
- Break-even analysis for different scenarios
- Comparison of different loan options
Common Closing Cost Mistakes
- Not budgeting for closing costs
- Not shopping around for services
- Not negotiating fees
- Not understanding what fees are required
- Not asking about assistance programs
- Not comparing total costs
- Not reading the loan estimate carefully
Closing Cost Checklist
- Get loan estimates from multiple lenders
- Compare fees line by line
- Negotiate with lenders
- Shop for third-party services
- Ask about assistance programs
- Consider seller concessions
- Review final closing disclosure
- Bring certified funds to closing
Calculate Your Closing Costs
Use our calculator to:
- Estimate total closing costs
- Compare different loan scenarios
- See impact of rolling costs into loan
- Plan for different home prices
- Understand cost breakdowns