Then the loan officer slides a document across the table with a number at the bottom that makes your stomach drop: $9,400 due at closing.
Closing costs are the fees charged for finalizing a mortgage, and they typically run 2% to 6% of the purchase price.
On a $350,000 home, that's anywhere from $7,000 to $21,000 paid upfront in cash.
They are separate from your down payment, and they are not optional.
The biggest line item is usually lender fees.
That includes the origination charge for processing your loan, an application fee, and often a rate lock fee to hold your interest rate while underwriting happens.
Add in an appraisal ($500–$700) and a credit report fee, and you're already looking at a few thousand dollars.
Title search and title insurance protect the lender if someone later claims ownership of the property.
Depending on your state, you may also owe attorney fees, a survey fee, and recording charges to file the deed with the county.
Prepaid items pile on top: property taxes and homeowners insurance that must be funded into escrow before you even move in.
Here is the part that trips up most buyers.
They vary by lender, by state, by loan type, and by the day you close.
A loan that closes at the end of the month carries less prepaid interest than one that closes on the 1st.
Your best defense is the Loan Estimate, a three-page form lenders must send within three business days of your application.
Compare it side by side with the Closing Disclosure, which arrives at least three business days before closing.
Some fees can only rise 10% from estimate to final, and others cannot change at all.
Ask the seller to cover a percentage of closing costs as part of your offer, especially in a slow market.
You can also ask your lender to waive the application fee or reduce the origination charge.
Shopping at least three lenders is the single easiest way to knock hundreds or thousands off the total.
First-time buyer programs through state housing agencies often include grants or low-interest loans specifically to cover these costs.
VA loans cap certain fees for veterans, and some USDA loans roll closing costs into the loan itself.
The mistake is treating closing costs as an afterthought.
Budget for them from day one, alongside your down payment.
A buyer with $40,000 saved for a $350,000 home might only afford a 10% down payment after closing costs eat the rest.
Knowing the real number before you bid keeps you from scrambling the week before you get the keys.
Our take: closing costs are the most predictable surprise in real estate, which means there is no excuse for being blindsided.
Read every page of your Loan Estimate, question anything that looks padded, and never assume the first quote is the best one.
Final Thoughts
The money you save on a phone call is real money in your pocket.