Then, three days before closing, a five-page document lands in your inbox with a number at the bottom that makes your stomach drop: thousands of dollars you didn't plan for.
That's the closing cost problem, and it catches a lot of first-time buyers off guard.
They're a separate pile of fees charged by lenders, title companies, appraisers, and local governments, all due on the day the keys change hands.
The Consumer Financial Protection Bureau says closing costs typically run 2% to 5% of the loan amount.
On a $350,000 mortgage, that's roughly $7,000 to $17,500.
On a $450,000 loan, you're looking at $9,000 to $22,500 — money that has to be in the bank, not tied up in your down payment.
A few of the big buckets: lender origination fees for processing your loan, an appraisal fee (usually $500 to $800) to confirm the home's value, a title search and title insurance to make sure nobody else has a claim on the property, and prepaid items like property taxes and homeowners insurance that get escrowed upfront.
Then there are the smaller line items that add up fast — recording fees, courier charges, credit report pulls, flood certification, and sometimes a home inspection you paid for weeks earlier and forgot to count.
Here's the part that surprises people most: closing costs are negotiable in some places and locked in others.
Shop around — you're often allowed to pick your own title company, and prices can vary by hundreds of dollars for the same coverage.
The single best tool you have is the Loan Estimate, a three-page form your lender 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.
Those two documents should match closely.
If something jumped, call your lender and ask why — you have the right to a clear answer.
If the cash isn't there, you have options.
Sellers sometimes agree to cover a portion of closing costs as part of the negotiation, especially in a slower market.
Some lenders offer "no-closing-cost" loans that roll the fees into a higher interest rate — cheaper today, more expensive over 30 years.
And certain down payment assistance programs bundle closing cost help for qualifying buyers.
One more thing worth doing: ask for a worst-case estimate before you fall in love with a house.
Knowing your real number early keeps you from stretching your budget to the breaking point.
Our take: closing costs aren't a scam, but they are a test of whether you actually read the paperwork.
Budget for the high end of the range, question every fee you don't recognize, and never sign at the table because you feel rushed.
Final Thoughts
The three-day rule exists to protect you — use it.