Key Takeaways
Budget 2–5% of the purchase price on top of your down payment — on a $400,000 home, that's $8,000–20,000. Half the fees are quoteable in advance, so a Loan Estimate lets you compare lenders line by line. Origination and title are the negotiable half; taxes and prepaids are not. And "no closing cost" refinances roll the fees into the rate — nothing is free, it's just amortized.
The line items, and where the money goes
Closing costs cluster in four groups. Lender charges: origination/underwriting (0.5–1% of loan, or a flat $1,000–2,500), points if you buy the rate down (1 point = 1% of loan ≈ 0.25% rate cut, roughly), credit report and appraisal ($400–800). Third-party charges: title search and lender's title insurance ($700–1,500 combined), settlement/escrow fee ($500–1,200), recording fees ($50–250), and survey where applicable.
Government charges: transfer taxes and deed stamps vary enormously — near zero in some states, 1–2%+ of price in others (paid by seller in many locales by convention). Prepaids and escrow funding: the first year of homeowner's insurance, several months of property tax, and prepaid interest from closing day to month-end. These aren't really "fees" — they're bills you'd pay anyway, collected early.
Worked example: $400,000 purchase, 20% down, $320,000 loan
Typical mid-cost market: origination $1,600 (0.5%), appraisal $600, credit $35, title search + lender's policy $1,100, settlement fee $900, recording $180, transfer tax 0.5% = $2,000, first-year insurance $1,800, tax escrow funding $2,400, prepaid interest $590. Total ≈ $11,200 — about 2.8% of price. High-cost coastal markets with 1.5% transfer taxes can push the same deal past $17,000.
Who pays what is convention plus negotiation: sellers commonly cover the agent commissions and, in buyer's markets, a credit toward the buyer's closing costs (an agreed sum at contract). A "$10,000 toward closing" concession on a $400k deal effectively rebates 2.5% — which is why asking for it beats an equivalent price cut when you're cash-constrained.
What's negotiable, and the refinance trap
Negotiable: origination fee (lenders compete here), settlement fee (shop title companies), and owner's title insurance rates (regulated in some states, shopped in others). Not negotiable: transfer taxes, appraisal (third party), prepaids. The refinance trap: a "no-cost refinance" trades fees for a rate roughly 0.125–0.375% higher. Run that trade through the Refinance Calculator — paying $4,000 closing to save 0.25% on a $320k loan breaks even around month 44; the no-cost version at 0.25% higher rate never catches up unless you sell early.
Run your own numbers
The Mortgage Calculator handles the payment side; closing cash-to-close rides on top of the down payment. Compare total interest against points paid with the Loan Calculator, and see whether paying points pays back within your holding period using the Amortization Calculator's year-by-year view.