Understanding Buyer’s Closing Costs

What Closing Costs Include

Closing costs typically range between 2%–6% of your loan amount and include the fees charged by lenders, title companies, and other professionals involved in your transaction. Below is a simplified breakdown of what you’ll encounter during closing.

Lender Fees

• Appraisal Fee

  Covers the cost of an independent appraisal to confirm market value.

  Estimated Range: $500 – $700
• Credit Report Fee

  Pays for your credit report, used to evaluate your financial history.

  Estimated Range: $30 – $50
• Origination & Underwriting

  Administrative costs for processing, evaluating, and preparing your loan documents.

  Estimated: Around 1% of the loan total
• Discount Points

  Optional pre-paid fees to reduce your long-term interest rate.

Title & Escrow Fees

• Title Insurance

  Protects both buyer and lender from ownership disputes or title defects.

  Estimated Range: $1,000 – $2,500+
• Escrow Fee

  Charged by the escrow company managing funds and documents during closing.

• Recording Fees

  County charges for recording the official deed and mortgage documents.

Prepaids & Other Costs

• Prepaid Interest

  Covers the daily interest from your closing date until your first mortgage payment.

• Escrow Account Pre-Funding

  Funds your initial escrow account for property taxes and insurance.

• Homeowner’s Insurance

  Typically paid upfront for the first year of coverage.

• Home Inspection

  Professional inspection of property condition, usually completed before closing.

  Estimated Range: $400 – $600