House Closing Costs: What Buyers and Sellers Pay by Loan Type

House closing costs typically run 2% to 5% of the purchase price for buyers and 6% to 10% for sellers once agent commissions are counted. On a home near the current U.S. median of roughly $398,000, a buyer might pay $8,000 to $20,000 in settlement charges, while the seller’s bill is dominated by commissions and transfer taxes. The actual number depends on your loan type, where you’re buying, and what you negotiate.

What Buyers Pay

Buyer closing costs cluster into four groups: lender charges, title-related expenses, government fees, and third-party services. The 2% to 5% range is a useful starting point, but composition matters more than the headline. Some fees are flat and barely budge with price. Others scale with the loan. A $200,000 purchase often lands closer to 4% or 5% because flat fees like appraisals and title searches eat up a larger share. A $600,000 purchase can come in closer to 2% or 3% for the same reason.

Lender Charges

The loan origination fee compensates your lender for processing the mortgage, typically 0.5% to 1% of the loan amount. On a $350,000 mortgage, that works out to $1,750 to $3,500. Some lenders fold this into a flat “underwriting” or “processing” fee instead of charging a percentage, so the line item name varies even when the function is the same.

Your lender will order a professional appraisal to confirm the home’s value supports the loan. Appraisal fees for a standard single-family home generally fall between $525 and $800, though complex or rural properties can push above $1,000. The only fee a lender can charge you before providing a Loan Estimate is the cost of pulling your credit report, which typically runs under $30.¹

Title-Related Expenses

A title search runs public records to confirm nobody else has a legal claim on the property. This usually costs a few hundred dollars. Title insurance is a separate, one-time premium paid at closing that protects against problems the search missed, such as forged documents, unknown heirs, or recording errors.² Most transactions involve two policies: a lender’s policy, which the buyer pays for, and an owner’s policy, which local custom assigns to either side.

Government Fees

Recording fees cover filing the new deed and mortgage with the local recorder’s office. These vary widely by jurisdiction and generally run between $50 and $250. Transfer taxes, sometimes called stamp or documentary taxes, are a separate charge calculated as a percentage of the sale price or a flat rate per thousand dollars. Not every state imposes them, and local custom determines who pays.

Attorney Fees and Surveys

Roughly a third of states require a licensed attorney to conduct or oversee the closing, prepare the deed, or certify the title. Attorney fees in those states typically run $500 to $3,000 depending on complexity. Even where an attorney isn’t required, some buyers hire one for complicated purchases. A property survey, if your lender requires one, adds another few hundred dollars to confirm boundary lines and easements.

Prepaids and Escrow Deposits

Your Closing Disclosure will include a “prepaids” section that can easily add several thousand dollars to the check you bring. These aren’t transaction fees. They’re advance payments on recurring expenses your lender wants funded before the first mortgage payment comes due.

Homeowners insurance: lenders typically require you to prepay 12 months at closing, since coverage must be in place before the loan funds.
Prepaid interest: you owe per diem interest from your closing date through the end of that month. Close on the 25th of a 30-day month, and you owe five days. Close on the 3rd, and you owe 27.³
Escrow deposits: your lender collects an initial cushion for property taxes and insurance. Federal rules cap this cushion at two months beyond what’s needed to cover upcoming bills.⁴
Property taxes: you’ll typically prepay your share from the closing date through the next tax due date.

Separating prepaids from true settlement fees in your head helps you understand what you’re paying for the transaction itself versus what you’d owe anyway. This is the category that surprises first-time buyers most often.

How Loan Type Changes the Bill

The mortgage product you choose adds loan-specific fees that don’t apply to other products. These charges can shift your total meaningfully.

FHA Loans

FHA loans require an upfront mortgage insurance premium equal to 1.75% of the base loan amount, paid at closing or rolled into the balance. On a $350,000 FHA mortgage, that’s $6,125 before any other closing fee. You’ll also pay an annual mortgage insurance premium in monthly installments for the life of the loan in most cases.

VA Loans

VA loans carry no mortgage insurance but do charge a funding fee that varies with your down payment and whether you’ve used the benefit before. First-time use with less than 5% down runs 2.15% of the loan amount. Five percent or more down drops it to 1.5%. Ten percent or more falls to 1.25%. Second-time use with less than 5% down jumps to 3.3%.⁵ Veterans with service-connected disabilities are exempt from the funding fee entirely.

Conventional Loans

Conventional loans don’t carry upfront government insurance premiums, but borrowers who put less than 20% down pay private mortgage insurance. PMI can involve a one-time premium at closing, a monthly premium, or both, depending on the insurer and your lender. Once you reach 78% loan-to-value, the lender must cancel PMI automatically.

What Sellers Pay

The biggest seller cost is the real estate agent commission. Before August 2024, sellers almost always paid both their listing agent and the buyer’s agent, typically totaling 5% to 6% of the sale price. That changed after the National Association of Realtors settlement, which eliminated the automatic requirement for sellers to cover the buyer’s agent fee. Each side now negotiates agent compensation separately, and sellers may or may not agree to pay the buyer’s agent. Total commissions have generally drifted closer to 5% across the industry, though the split varies deal by deal.

Beyond commissions, sellers commonly pay transfer taxes where they’re imposed, the owner’s title insurance policy for the buyer in many markets, and prorated property taxes owed up to the closing date. Outstanding liens, HOA fees, and mortgage payoff costs also come out of the seller’s proceeds. A seller’s total closing expenses, commissions included, often land between 6% and 10% of the sale price.

Negotiating Seller Concessions

Seller concessions let the seller cover some or all of the buyer’s closing costs, reducing how much cash you need at the table. The practice is especially common in buyer-friendly markets or when the seller is motivated. Your loan type caps how much the seller can contribute.

Conventional loans: 3% of the sale price with less than 10% down, 6% with 10% to 25% down, and 9% with more than 25% down.
FHA loans: sellers and other interested parties can contribute up to 6% of the sale price toward origination fees, closing costs, prepaid items, and discount points.⁶
VA loans: standard closing costs the seller pays (appraisal, title, recording fees) don’t count against any cap. Extras beyond those, like paying the buyer’s funding fee, prepaying insurance, or buying down the rate, are limited to 4% of the appraised value.⁵
USDA loans: up to 6% of the sale price.

Concessions must be negotiated as part of your purchase agreement and in writing before closing. One tactical note: asking for concessions often means bumping the contract price to compensate the seller, and that only works if the appraisal supports the higher number.

The Loan Estimate and Closing Disclosure

Two documents spell out your costs. The Loan Estimate arrives within three business days of submitting your mortgage application and gives you an itemized preview of expected fees. The Closing Disclosure arrives at least three business days before your closing date with the final, locked-in numbers.⁷

Comparing the two line by line is where most buyers catch problems. Federal rules restrict how much certain fees can increase between the Loan Estimate and Closing Disclosure, with three tolerance tiers.⁸

Zero tolerance: lender-controlled fees cannot increase at all. This includes the origination fee, discount points, transfer taxes, and services where the lender chose the provider.
10% cumulative tolerance: fees for third-party services the lender selected, like appraisals, credit reports, and flood determinations, can increase, but the total increase across all fees in this category can’t exceed 10% of the original estimate.
No limit: fees for services you shopped for yourself, plus prepaids like homeowners insurance and per diem interest, can change without restriction.

If your lender violates a tolerance limit, they must refund the excess within 60 days of closing. The “Calculating Cash to Close” section on page three of your Closing Disclosure shows exactly how much to bring, accounting for your down payment, deposit, closing costs, and any seller credits. Confirm that total with your settlement agent before wiring funds.

Ways to Lower What You Pay

Closing costs aren’t fixed. A few approaches can meaningfully reduce the bill.

Ask for lender credits. Your lender can cover part or all of your closing costs in exchange for a slightly higher interest rate. If you plan to sell or refinance within a few years, accepting a higher rate to eliminate upfront costs can make financial sense. On longer holds, the extra interest eventually costs more than the fees would have.⁹

Shop for third-party services. Your lender must identify which services you’re allowed to shop for on the Loan Estimate. Title insurance, settlement agents, and survey providers are commonly shoppable, and quotes can vary by hundreds of dollars. Two or three quotes is an afternoon’s work.

Compare Loan Estimates from multiple lenders. Origination fees, underwriting fees, and lender credits differ across lenders for the same borrower profile. You’re entitled to a Loan Estimate from any lender you apply with, and comparing them side by side reveals which lender is actually cheaper once all the fees are accounted for.

Close late in the month. Prepaid interest accrues daily from closing through month-end, so closing on the 28th means two or three days of prepaid interest instead of 25 or more. The trade-off is a tighter timeline if anything goes wrong, but the savings on a large loan can run into the hundreds.

Which Closing Costs Are Tax-Deductible

Most closing costs are not deductible, and even the deductible ones only help if you itemize rather than take the standard deduction.

Mortgage points: discount points paid to reduce your interest rate are deductible in the year you pay them, as long as the loan is for your primary residence, the points are calculated as a percentage of the mortgage, and you provide funds at closing at least equal to the points charged. Points the seller pays on your behalf are also deductible by you, though you must reduce your cost basis in the home by that amount.¹⁰
Prepaid mortgage interest: the per diem interest you pay at closing is deductible as mortgage interest.
Property taxes: your share of real estate taxes from the closing date forward is deductible in the year paid.¹¹

Everything else, including origination fees, appraisals, title insurance, recording fees, transfer taxes, and homeowners insurance, is not deductible. Most non-deductible costs get added to your home’s cost basis, which reduces any taxable gain when you sell.¹¹

Protecting Your Closing Funds from Wire Fraud

Wire fraud at closing has become one of the most common real estate scams. Criminals hack into a real estate agent’s or title company’s email, then send the buyer fraudulent wiring instructions that route the funds to a thief’s account. Once the wire goes through, the money is usually gone.

The CFPB recommends identifying two trusted people in your transaction, your agent and your settlement agent, and discussing the wiring process with them by phone or in person rather than email. Agree on a way to verify identities, such as a code phrase. When you receive wiring instructions, call your settlement agent at a number you already have on file to confirm the account details. Never rely on phone numbers or links contained in an email, and never send financial information by email.¹² If you suspect you’ve been targeted, contact your bank immediately to attempt a wire recall and file a complaint with the FBI’s Internet Crime Complaint Center. Recoveries are far more likely within the first 24 hours.

1
Consumer Financial Protection Bureau. How Much Does It Cost to Receive a Loan Estimate?
2
National Association of Insurance Commissioners. Consumer Guide to Title Insurance
3
Consumer Financial Protection Bureau. What Are Prepaid Interest Charges?
4
Consumer Financial Protection Bureau. Regulation X – 1024.17 Escrow Accounts
5
U.S. Department of Veterans Affairs. VA Funding Fee and Loan Closing Costs
6
U.S. Department of Housing and Urban Development. What Costs Can a Seller or Other Interested Party Pay on Behalf of the Borrower
7
Consumer Financial Protection Bureau. What Should I Do If I Do Not Get a Closing Disclosure Three Days Before My Mortgage Closing?
8
eCFR. 12 CFR 1026.19 – Certain Mortgage and Variable-Rate Transactions
9
Consumer Financial Protection Bureau. How Should I Use Lender Credits and Points (Also Called Discount Points)?
10
Internal Revenue Service. Topic No. 504, Home Mortgage Points
11
Internal Revenue Service. Publication 530, Tax Information for Homeowners
12
Consumer Financial Protection Bureau. Mortgage Closing Scams – How to Protect Yourself and Your Closing Funds