When you buy a home, the down payment is only part of the bill.
Closing costs typically run 2% to 6% of the loan amount, according to estimates from mortgage data firm ClosingCorp, and they come due on a single day.
On a $400,000 home, that's roughly $8,000 to $24,000 on top of your down payment.
Closing costs bundle together lender fees (origination, underwriting, credit checks), third-party fees (appraisal, title search, title insurance, survey), prepaid items (property taxes, homeowners insurance, mortgage interest), and government recording charges.
Each line item is negotiable or at least worth questioning — especially lender fees, which vary widely between companies.
Lenders must send this three-page form within three business days of your application, and it breaks down every projected cost.
Compare it side by side with offers from at least two other lenders.
A difference of $1,500 in origination fees on the same rate is common, and that money stays in your pocket if you shop around.
You'll get this five-page form at least three business days before closing.
Under federal rules, certain fees can't increase from the Loan Estimate — lender charges, transfer taxes, and recording fees are locked.
Others, like prepaid interest and homeowners insurance, can shift slightly.
If something jumps by hundreds of dollars, call your loan officer before you sign anything.
Sellers traditionally cover the real estate agent commissions — usually 5% to 6% of the sale price, though that structure is shifting after recent industry rule changes — plus the owner's title insurance policy and prorated property taxes.
In a buyer's market, sellers often agree to cover some or all of the buyer's closing costs as a concession.
Fifth, find help if you're short on cash.
Government-backed loans offer options: FHA loans allow seller contributions up to 6% of the price, VA loans let eligible buyers roll most closing costs into the loan, and USDA loans often cover them entirely.
Some conventional lenders also offer lender credits — a slightly higher interest rate in exchange for lower upfront costs.
Run the math on how long you'd need to stay in the home for that trade to pay off.
Sixth, budget for the extras nobody mentions.
You'll likely need to prepay several months of property taxes and insurance into an escrow account, plus a few days of prepaid interest.
In expensive markets like California or New York, those prepaids alone can add thousands.
Ask your lender for a "cash to close" figure early so you're not scrambling in the final week.
Finally, don't skip the final walkthrough or the closing table review.
Read every page, confirm the numbers match your Closing Disclosure, and ask about anything that looks unfamiliar.
You have the right to question fees right up until you sign.
The bottom line: closing costs are not a surprise tax — they're a list of services, and every line on that list can be reviewed, compared, or negotiated.
Buyers who shop lenders and ask sellers for concessions routinely save four figures.
Final Thoughts
Treat the paperwork like a grocery receipt: check it, question it, and don't pay for anything you didn't agree to.