Quick answer

The Consumer Financial Protection Bureau says closing costs typically range from 2% to 5% of the home purchase price, excluding the down payment. On a $400,000 purchase, that rough planning range is $8,000 to $20,000. Your actual amount depends on the loan, state and local charges, lender fees, title services, prepaid items and negotiated credits.

Use the Closing Cost Calculator to create a planning range before you receive formal lender documents.

Closing costs versus cash to close

These terms are related but not interchangeable. Closing costs are the fees and prepaid charges connected with the loan and transfer. Cash to close is the total amount you must bring after accounting for your down payment, closing costs, deposits already paid, lender credits, seller credits and other adjustments.

A buyer can therefore have $12,000 in closing costs but a much larger cash-to-close amount because the down payment is added. The reverse can also happen when credits reduce the amount due at closing.

Common categories of closing costs

Loan costs

Loan costs can include origination charges, underwriting or processing charges, discount points and fees for services required by the lender. One discount point equals 1% of the loan amount, but the interest-rate reduction received for a point is not fixed.

Property and title services

Depending on the transaction, buyers may see appraisal, title search, title insurance, settlement, recording, survey, attorney or inspection-related charges. Which party pays a particular fee can vary by location and contract.

Prepaids and initial escrow funding

Prepaid interest, homeowners insurance premiums and initial escrow deposits can increase the amount due. These are not always fees in the ordinary sense; some are amounts collected in advance for future bills.

Taxes and government charges

Recording fees and transfer-related taxes vary by state and locality. Do not use a national percentage as a substitute for local estimates.

How to use the Loan Estimate and Closing Disclosure

The Loan Estimate is designed to help you understand and compare proposed loan terms and estimated costs. The Closing Disclosure shows the final terms and costs. Compare the two line by line, with special attention to the interest rate, loan amount, monthly payment, lender credits, total loan costs and cash to close.

Some costs cannot increase, some can increase only within a tolerance, and others can change based on circumstances or your choices. Ask the lender to explain every material difference rather than assuming a higher number is unavoidable.

Ways to manage closing costs

  • Request Loan Estimates from more than one lender using comparable loan assumptions.
  • Compare total costs, not only the advertised interest rate.
  • Ask which services you may shop for and compare providers where permitted.
  • Evaluate lender credits carefully; they may be paired with a higher interest rate.
  • Negotiate seller credits only within loan-program and contract limits.
  • Keep a separate buffer because final cash-to-close can differ from an early percentage estimate.

Common planning mistakes

A percentage estimate is useful early, but it can hide important differences. A low-down-payment loan can still require meaningful closing cash. A no-closing-cost offer usually means the cost is recovered through a higher rate, a larger loan balance or another pricing tradeoff. Also, do not count money reserved for moving, immediate repairs or an emergency fund as available closing cash.

Frequently asked questions

Are closing costs included in the down payment?

No. They are separate, although both are included when calculating cash to close.

Can closing costs be rolled into the mortgage?

Sometimes, depending on the loan and transaction. Financing costs can increase the balance or rate, so compare the long-term effect.

When will I know the final amount?

Your Closing Disclosure provides the final terms and costs. Review it promptly and ask about differences from the Loan Estimate.

Sources and references

Sources were checked for this guide on July 27, 2026. Policy terms, tax rules and local prices can change.

General-information disclaimer

This guide is for general planning only. It is not a quote, policy interpretation, legal advice, tax advice, engineering advice or a substitute for a licensed professional who can review your property and documents.