Then the closing paperwork lands, and the number at the bottom is thousands of dollars higher than you budgeted for.
Closing costs are the fees and expenses you pay to finalize a mortgage and transfer a home's title.
They typically run 2% to 6% of the purchase price, according to housing finance data.
On a $400,000 home, that's roughly $8,000 to $24,000 — separate from your down payment.
Here's what's actually inside that stack of paper.
You'll see an origination fee for processing the loan, an appraisal charge to confirm the home's value, a credit report fee, and title search and title insurance costs.
There are also prepaid items: property taxes and homeowners insurance that the lender collects upfront and holds in escrow.
Lender fees are often where you have leverage — ask for a breakdown in writing and compare it against competing offers.
Third-party costs like appraisals are harder to move, but you can still shop for title insurance in many states, which can save hundreds.
Who pays what is a common point of confusion.
Buyers usually cover most closing costs, but sellers pay real estate agent commissions and, in many markets, a portion of transfer taxes.
In a slower housing market, buyers have more room to ask the seller to contribute toward closing costs — a concession that's far more common now than during the bidding-war years.
You'll get a Loan Estimate within three business days of applying.
Then, three business days before closing, you receive a Closing Disclosure.
Federal rules limit how much certain fees can increase between those documents, so a big jump is a red flag worth questioning.
A few ways to shrink the bill: ask about lender credits in exchange for a slightly higher interest rate (worth running the math on how long you'll stay), close near the end of the month to reduce prepaid interest, and check whether you qualify for first-time buyer grants or state assistance programs.
Our take: closing costs are one of the least transparent parts of buying a home, and that opacity costs people real money.
Final Thoughts
Treat every fee as a question, not a given — and never sign a Closing Disclosure the day you receive it.