How Closing Costs Work When Buying a Home
Published Apr 13, 2026 · 6 min read
Closing costs are the fees and expenses paid when a real estate transaction is finalized. They typically total 2-5% of the purchase price for buyers.
Common Buyer Closing Costs
| Fee | Typical Cost |
|---|---|
| Loan origination fee | 0.5-1% of loan |
| Appraisal | $300-$600 |
| Home inspection | $300-$500 |
| Title insurance | $500-$3,500 |
| Attorney fees | $500-$2,000 |
| Prepaid taxes/insurance | 2-6 months |
| Recording fees | $100-$250 |
How to Reduce Closing Costs
- Compare Loan Estimates from at least 3 lenders
- Negotiate seller concessions (seller pays part of your closing costs)
- Ask about lender credits (higher rate for lower closing costs)
- Close at end of month to reduce prepaid interest
Try it: Use our Closing Costs Calculator to estimate your total closing costs based on home price and location.