Typical Buyer Closing Costs
Buying a home is a huge purchase and it helps to prepare for the types of expenses that are to come. Homebuyers pay an average of 3% of the purchase price for closing costs. We've compiled the typical fees that you'll pay in the chart below, some of which you'll pay upfront and the rest at closing.
What are my upfront expenses required for Inspections & Appraisal?
Your lender may collect a fee from you for the application and appraisal at the time you apply for a loan. These fees are described below. Also, once you are under contract — it is always a good idea to hire a qualified home inspector to make you aware of any issues with the home that may require repair.
What are my typical Buyer Closing Costs?
These costs to close on your home vary from state to state. We have included this chart below as an estimate of the most typical fees you can expect. Please check with your closing company for title/escrow to ensure you have a breakdown of your specific costs so you can avoid surprises.
Fee name |
Description |
Who gets the money? |
How much? |
|---|---|---|---|
| Application fee | Lenders and brokers may charge a fee when you first apply for your loan. This fee may be waived in an effort to attract business, or it may be applied toward closing costs. If your loan application is rejected, or you decide to switch lenders, the original lender may keep your application fee. | Lender | $300 or more (However, many lenders do not charge an application fee.) |
| Appraisal fee | This covers the cost of an appraisal — an assessment of the home's value that assures the lender that the home is worth as much as you're borrowing and spending to purchase it. | Lender or appraisal company | $350–$500 |
| Credit report fee | This covers the cost of getting your credit scores. The average consumer can get these reports for $45 — your lender should be paying around the same, if not less. | Lender | $45 or less |
| Processing fee | This covers the costs of filing and dealing with the paperwork involved in getting your loan ready for the underwriter — the person who actually verifies your information and approves your loan. | Lender | $500-$1000 |
| Underwriting fee | This covers the cost of having your loan verified and approved by a specific lender employee, known as an underwriter. | Lender | $200–$800 |
| Escrow fees | This covers the service of an escrow company or attorney — they act as a neutral party to transfer money and paperwork. | Escrow firm or attorney | Varies with home price and location |
| Title insurance | This is paid once, at the time of closing. Though it may seem like the buyer would pay for his own insurance, the seller actually pays for the buyer's policy. The buyer, in turn, pays for a policy to protect the lender, who has a legal claim on the property (also called a lien) until the mortgage is paid off. | Paid toward lender's policy | $200–$900 |
| Transfer of taxes | This covers the cost of transferring responsibility for property taxes from the seller to the buyer. | Lender, or county or municipality | Varies by location. |
| Title company fee | The title company charges a fee to verify that the property is free of ownership or usage disputes. | Title company | $150–$400 |
| Survey fee | This may be lumped in with the title company fee, or listed separately: it covers the cost of a survey to verify the boundaries of the property being purchased. | Title company | $100–$400 |
| Attorney fees | In some states, an attorney is required to complete a home purchase. | Attorney | Varies by state, usually $350 or more. |
| Home inspection | Before you close, you should have a home inspection by a professional. This will protect you from buying a home with serious problems that require expensive repairs. | Inspector | $350-500 |
| Pest (termite) inspection | Some states, such as California, require a pest inspection. A pest inspector will check the property for termites and other insects that can cause structural damage to a home. | Inspector | $50–$125 (may be included in home inspection cost) |
| Flood determination (life of loan) | This fee is paid to determine whether or not your home lies in a flood zone. A "life of loan" fee pays for the flood determination company to monitor your home's flood zone status over the lifetime of your mortgage. | Lender or insurance issuer | $15–30 |
| Recording fees | This covers the cost of having your home purchase recorded in the local public record by the county government. | County or municipality | $50–$200 |
| Courier fees | This covers the cost of hiring couriers to shuttle your documents to and from the lender, escrow firm, title company, and county during the closing process. You may be charged for this even if you don't use this service, so be sure to look for it. | Lender or courier company | $50–$150 |
Want more advice about all things home — including homebuying or selling advice? Nestiny is a great place for homebuyer education and to help you gauge how ready you are to buy a home. Journey Homeward allows you to enter all your wants and needs while the True Affordability Tool will break down your budget, showing what you can comfortably afford. You will also receive a Ready Report that will give you a vital head start in the home buying journey, saving you valuable time and money.
