The number that blindsides most homebuyers isn't the down payment.
It's the second bill that shows up at the closing table, often running $6,000 to $12,000 on a typical American home.
Closing costs are the fees charged to finalize a mortgage and transfer a property.
They cover everything from the lender's paperwork to the title search, the appraisal, and the county recording fee.
Nationwide, they average roughly 2% to 6% of the purchase price, according to housing data—so on a $400,000 house, plan for $8,000 to $24,000.
Lender origination fees can hit 1% of the loan.
A title search and lender's title insurance can top $1,000.
Add in credit report fees, flood certifications, prepaid property taxes, homeowners insurance, and HOA transfer charges, and the line items stack up fast.
With mortgage rates hovering in the mid-6% range, buyers already stretched on monthly payments are dipping into savings meant for emergencies.
First-time buyers feel it most, since they often can't tap home equity or a prior sale to cover the gap.
Sellers can be asked to cover a portion of closing costs—a common concession in slower markets.
Some lenders offer no-closing-cost mortgages that roll the fees into a higher rate, which saves cash upfront but costs more over 30 years.
Shopping at least three lenders for a Loan Estimate is one of the few moves that reliably moves the number, since these forms are standardized and easy to compare side by side.
Your Loan Estimate arrives within three business days of applying; the Closing Disclosure lands three days before signing.
Compare them line by line—fees that jump without a valid reason are worth challenging.
And don't skip the fine print on "junk fees" like courier charges or email fees, which regulators have been cracking down on.
FHA and VA buyers sometimes qualify for seller-paid concessions up to 6% and 4% of the price, respectively.
State housing agencies also run down-payment and closing-cost assistance programs that many eligible buyers never claim simply because they don't ask.
The bottom line: closing costs aren't a surprise you have to absorb quietly.
They're negotiable, shoppable, and sometimes covered by someone else.
Treat the Loan Estimate like a grocery receipt, not a formality.
Our take: the smartest move isn't finding the lowest rate—it's budgeting for the full cost of getting the keys.
Final Thoughts
Buyers who ask about concessions and compare three Loan Estimates routinely walk away with thousands still in the bank.