Then, three days before closing, a document lands in your inbox with a number that makes your stomach drop: closing costs, often running 2% to 6% of the loan amount.
On a $350,000 home, that's anywhere from $7,000 to $21,000 on top of everything else you've already paid.
Here's the part that catches most buyers off guard.
Closing costs aren't one fee — they're a stack of them, and they come from different people.
Your lender charges an origination fee for creating the loan.
The title company charges for a title search and title insurance, which protects against someone else claiming ownership of the home.
There's an appraisal fee, a credit report fee, recording fees to your county, and typically prepaid property taxes and homeowners insurance that get tucked into the same pile.
Then there are the costs tied to where you live.
Some states require an attorney at closing, which adds $500 to $1,500.
Others use a title company or escrow officer instead.
Transfer taxes, sometimes called documentary stamp taxes, vary wildly by state and county — in some places they're a few hundred dollars, in others they can climb into the thousands.
The good news is that a lot of this is negotiable or at least shoppable.
Your lender is required to give you a Loan Estimate within three business days of your application, and a Closing Disclosure at least three business days before closing.
Compare those two documents line by line.
If a fee jumped, you're allowed to ask why in writing — and lenders have to explain certain increases.
You can also shop for your own title insurance and, in many cases, your own homeowners insurance rather than accepting the first quote your lender hands you.
On a typical purchase, that alone can save several hundred dollars.
Some buyers also ask the seller to cover a portion of closing costs as part of the negotiation, especially in a slower market where buyers have more leverage than they did a couple of years ago.
First-time buyers should check whether they qualify for assistance programs.
Many state housing finance agencies offer grants or low-interest second loans specifically to cover closing costs, and some lender programs do the same.
These aren't handouts — they usually come with income limits and occasionally a requirement to stay in the home for a few years — but they can meaningfully shrink the cash you need at the table.
One more thing people miss: closing costs aren't always paid in full at closing.
Some get rolled into the loan, which lowers your upfront cash but raises what you owe over time.
That trade-off is worth running the numbers on rather than accepting automatically.
Our take: closing costs are one of the least transparent parts of buying a home, and that's exactly why they're worth ten minutes of your attention.
Read the Loan Estimate the day it arrives, ask about every line you don't recognize, and get at least one competing quote on title insurance.
Final Thoughts
The savings won't change your life, but they might cover your first few months of utilities.