Then, three days before closing, a five-page document lands in your inbox with a number on the last line that makes your stomach drop: thousands of dollars you didn't plan for.
That number is closing costs, and they're one of the most misunderstood expenses in American homebuying.
They typically run 2% to 6% of the loan amount, according to consumer finance data.
On a $350,000 home, that's $7,000 to $21,000 due at signing — on top of your down payment.
Closing costs are a bundle of fees from several different parties, all collected at once.
Your lender charges an origination fee for processing the loan, plus appraisal and credit check fees.
Title companies charge for searching property records and issuing title insurance.
You'll also owe prepaid items: property taxes, homeowners insurance, and mortgage interest for the days you'll own the home that month.
A home inspection usually runs $300 to $500.
An appraisal typically costs $500 to $700.
If you're in a state that requires an attorney at closing, add another $500 to $1,500.
Government recording fees and transfer taxes vary wildly by state and county — in some places they're a few hundred dollars, in others they're thousands.
Here's the part that catches people off guard: closing costs aren't set in stone.
The Loan Estimate your lender must send within three business days of your application breaks everything into categories, and some of those numbers can't legally increase after you've locked them in.
Others, like prepaid interest and escrow deposits, can shift based on your closing date.
Your best move is to compare Loan Estimates from at least three lenders side by side.
The Consumer Financial Protection Bureau publishes a free tool for this, and the differences between offers are often thousands of dollars.
Don't just look at the interest rate — a slightly higher rate with lower fees can cost less over the first several years.
You can also ask the seller to cover part of your closing costs.
In a slower market, many buyers negotiate this successfully, especially if the home has sat for a few weeks.
Sellers can contribute a percentage of the purchase price toward your costs, which effectively rolls some of that upfront bill into the deal.
First-time buyers should check state and local programs too.
Many housing finance agencies offer grants or low-interest loans specifically to cover closing costs, and some don't require repayment if you stay in the home for a set number of years.
These programs are underused simply because people don't know to ask.
One more thing: never wire closing funds based on an email alone.
Wire fraud targeting homebuyers is common, and a spoofed message from your "title company" can drain your account in minutes.
Call your closing agent at a number you verified independently before sending anything.
The bottom line is that closing costs are negotiable, comparable, and — with enough lead time — plannable.
Ask for the full Loan Estimate early, question every line you don't understand, and shop around like you would for any other major purchase.
Final Thoughts
The paperwork is dense, but the money at stake is real.