When buying or refinancing a home, you’ll encounter mortgage closing costs – fees and expenses required to finalize your loan. These costs cover essential services like loan origination, appraisal, title insurance, and escrow. They vary based on factors such as loan type, lender, and location.
How Much Are Mortgage Closing Costs?
Closing costs typically range from 2% to 5% of a home’s purchase price.
For example:
- On a $300,000 home, expect to pay $6,000 to $15,000 in closing costs.
- On a $500,000 home, costs may range from $10,000 to $25,000.
Common Closing Costs Breakdown
Here’s a closer look at the typical fees included in mortgage closing costs:
Loan-Related Fees
- Origination Fee: 0.5%–1% of the loan amount
- Discount Points: Optional fee to lower your interest rate
- Application Fee: $300–$500
- Underwriting Fee: $500–$1,500
Property-Related Fees
- Appraisal Fee: $300–$700
- Home Inspection Fee (if required): $300–$500
Title Fees & Insurance
- Title Search & Insurance: $1,000–$2,500
- Recording Fees: $100–$300
Prepaid Costs (Escrow)
- Property Taxes: Varies by location
- Homeowners Insurance: Typically paid for the first year upfront
- Mortgage Interest: Covers interest from the closing date to the end of the month
Other Potential Fees
- HOA Transfer Fee (if applicable): Varies
- Attorney Fees (if required by state): $500–$1,500
How to Reduce Mortgage Closing Costs
- Negotiate seller concessions to have the seller cover some costs.
- Ask about lender credits in exchange for a slightly higher interest rate.
- Consider a no-closing-cost loan, where fees are rolled into the loan’s interest rate.
Would you like help estimating closing costs for a specific home price? Contact us for a personalized breakdown!
Ellen Wilson
703-864-3773
[email protected]
NMLS #591525
Licensed Mortgage Professional
Fidelity Direct Mortgage
8133 Leesburg Pike Suite 700
Vienna, VA 22182