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Where Closing Costs Can Come From

  • Real estate transfer taxes: These taxes are charged by the state or local government to transfer ownership.
  • Title insurance: Title insurance is a one-time payment that protects you if there are any problems with the title to the property. It’s around 1 – 2% of the home's purchase price.
  • Appraisal fee: This is paid to an appraiser who estimates the value of the property. It’s typically $300 – $500.
  • Mortgage origination fee: The mortgage origination fee is charged by the lender to process your loan application. The fee amount varies depending on the lender and the type of loan you get.
  • Document preparation fee: This fee is charged by the title company or closing attorney to prepare the closing documents. It’s around $100 – $300. 
  • Notary fees: Notary fees are charged by a notary public to witness the signing of the closing documents. They can be $50 – $100.
  • Recording fees: Recording fees are charged by the county to record the deed and mortgage at the county recorder's office, and are around $50 – $100.
  • Inspection fees: In addition to these common closing costs, there may be other fees that you'll need to pay, like pest inspection fees, home inspection fees, and survey fees.

How to Reduce Your Closing Costs

  • Negotiate with the seller: In some cases, the seller may be willing to pay some of your closing costs.
  • Ask about closing cost assistance programs: Some lenders, states, and local governments offer closing cost assistance programs for first-time homebuyers.
  • Consider a government-backed loan: Government-backed loans, like FHA loans and VA loans, typically have lower closing costs than conventional loans.