Fees paid at the end of a real estate transaction, typically 2–5% of the loan amount.
Closing costs are fees and expenses paid to finalize a real estate purchase, charged by lenders, title companies, attorneys, and other service providers. These typically include loan origination fees, appraisal fees, title insurance, property taxes, homeowners insurance, attorney fees, survey fees, and title search costs. Closing costs generally range from 2% to 5% of the purchase price—on a $300,000 home, that could be $6,000 to $15,000. Both buyers and sellers may pay closing costs, though the breakdown varies by state and negotiation. It's important to understand what closing costs you'll face before finalizing a purchase; lenders must provide a Closing Disclosure showing all costs three days before closing. Some buyers negotiate with sellers to cover certain costs or explore options like no-closing-cost mortgages (which typically have higher interest rates).