What Are Closing Costs and How Much Will You Pay?

Key takeaways

• Closing costs are fees associated with buying and selling a home, like taxes and insurance.
• Buyers usually pay 2% – 5% of the purchase price in closing costs, but this varies.
• Closing costs are due on closing day when the home is transferred from seller to buyer.

When buying a home, there’s one big expense beyond your down payment that you’ll need to save for – closing costs. These fees cover everything from lender charges to title insurance and can add up quickly. In this Redfin article, we’ll break down what closing costs are, how much they typically run, and who foots the bill. Whether you’re buying a house in Reno, NV, or a condo in Kansas City, MO, here’s what you need to know before closing day.

What are closing costs?

Closing costs are the fees and expenses you’ll pay when finalizing a home purchase. They typically include taxes, title insurance, appraisal fees, and lender charges. For buyers taking out a mortgage loan, closing costs are listed on the closing disclosure statement, which you’ll receive from the lender at least three days before closing.

How much are closing costs on a house?

Closing cost amounts typically range from 2% – 5% of the purchase price, but vary depending on the buyer’s loan program. For example, closing costs on a $300,000 home could range from $6,000 to $15,000. The buyer’s down payment must also be paid at closing, but it’s listed separately from the closing costs.

How do you estimate closing costs?

Closing costs vary from one home purchase to the next, and certain factors can increase or decrease the total amount. It’s a good idea to prepare to pay at the higher end of the range, since costs can vary based on your lender, loan type, and timing of the purchase..

Here are some factors that impact your closing costs:

• The purchase price of the home
• Your down payment amount
• The type of loan you choose
• Any adjustments you negotiate with the seller

As mentioned above, closing costs run between 2% – 5% of the home’s purchase price. Using the median sale price for a single-family home from March 2026, $436,705, the average closing costs could range anywhere from $8,734 – $21,835.

Who pays closing costs – buyer or seller?

Typically, buyers pay most of the closing costs. However, there are instances when the seller may have to pay some fees at closing too. You can also negotiate with the seller to cover some of the closing costs, also called seller concessions. Keep in mind that the seller can only offer so much in closing costs, depending on the buyer’s loan type, down payment amount, and more.

When are closing costs due?

With most home loans, closing costs are due on closing day, the day the property is officially transferred to the buyer. Some closing costs are due prior to closing, such as home inspection and land survey fees. In that case, any unpaid closing costs will be paid on the closing date.

What is included in closing costs for buyers?

Closing costs include a variety of fees, and not every buyer pays the same fees. Some costs differ by lender, loan type, and the state you live in. Prior to closing, at least 3 days before, you’ll receive a closing disclosure that details all the fees you’ll be expected to pay.

Here are the most common closing costs:

Application fee: Some lenders charge an application fee, which can be upwards of $500. It may be a standalone fee or a deposit used toward other closing costs.

Appraisal costs: Home appraisals can cost $300 – $500, depending on your location and home price. If you pay for the home appraisal at the time of service, it won’t be included as part of your closing costs.

Attorney fees: Depending on the state you live in, you may need to have a real estate attorney. They draw up the paperwork for a title transfer and coordinate the closing. These fees vary.

Closing fees: You’ll pay closing fees to the escrow company or attorney that holds the closing meeting. These fees vary depending on whether an attorney is present.

Courier costs: Courier fees cover the costs associated with delivering mortgage documents. It’s usually around $30.

Credit reporting fee: Between $10 – $100, credit reporting fees cover the cost of generating your credit score and report.

Earnest money: In most areas, you will pay an earnest money deposit, about 1% – 3% of the home’s price, when you reach mutual acceptance on your home purchase. Your earnest money amount will be credited toward your total cash to close (including your down payment and closing costs).

Escrow funds: Also called prepaids or reserve funds, escrow holds funds for mortgage insurance, home insurance, and property taxes. Your lender holds this money in an escrow account and uses the funds toward your mortgage payments. Depending on the lender, you may need to put a few months of expenses into the escrow account.

FHA mortgage insurance: If you have an FHA loan, you’ll need to pay a mortgage insurance premium (MIP). Unless you have a 10% down payment, you’ll need to pay an upfront amount and a monthly fee for the duration of the loan. The initial payment ranges from 0.15% to 0.75% of the loan amount.