The check you write on closing day is bigger than that number suggests.
Closing costs typically run 2% to 6% of the purchase price, which on a $350,000 home means somewhere between $7,000 and $21,000 on top of your down payment.
That gap catches a lot of first-time buyers off guard.
Your lender charges an origination fee for processing the loan, often 0.5% to 1% of what you borrow.
There's an appraisal fee, usually $300 to $600, to confirm the home is worth what you're paying.
Title search and title insurance protect you and the lender from ownership disputes, and together they can run $1,000 to $2,500 depending on your state.
Then come the prepaid items, which aren't fees so much as money you're fronting.
Property taxes and homeowner's insurance get collected in advance and parked in escrow.
If you close in October, you may need to fund several months of taxes up front so the servicer has a cushion.
Depending on your closing date, this line item alone can swing by a few thousand dollars.
Some costs are negotiable and some aren't.
Appraisal and credit report fees are set by third parties, so there's little wiggle room.
But lender fees, title insurance, and closing agent charges can sometimes be negotiated, especially if you shop around.
Ask for quotes from at least two title companies; the difference is often a few hundred dollars for the same work.
The Loan Estimate form is your best tool.
Lenders must send it within three business days of your application, and it breaks every projected cost into clear categories.
Compare it against the Closing Disclosure you receive three days before closing.
If a number jumped, ask why in writing before you sign anything.
First-time buyer programs can chip away at the total.
Many state housing finance agencies offer grants or deferred loans that cover part or all of closing costs for buyers under certain income limits.
FHA loans allow sellers to contribute up to 6% of the purchase price toward your costs, and conventional loans often allow 3% to 9% depending on your down payment.
In a soft market, asking the seller to cover closing costs is a normal part of the deal.
One thing to watch: the "no closing cost" mortgage.
It usually means the lender rolled the fees into a higher interest rate.
On a $300,000 loan, a rate bump of 0.25% can cost more over 30 years than paying the fees upfront.
Run the math on how long you plan to stay before choosing that route.
Budget for a few hundred dollars beyond the official numbers too.
Wire transfer fees, a courier charge, a last-minute county recording fee — small items that add up.
Keep a cushion of $1,000 to $2,000 in your account so a rounding error doesn't delay your closing.
My take: closing costs are the most predictable surprise in homebuying, which means there's no excuse for being blindsided.
Get your Loan Estimate early, compare title quotes, and ask the seller to help in a slow market.
Final Thoughts
A few hours of paperwork can save you thousands.