How Much Are Closing Costs?

Closing costs are the one-time fees and charges you pay to finalize a mortgage and take ownership of a home. They are paid at closing — the final step where the loan is funded and the title transfers — and they sit on top of your down payment. Some go to the lender for setting up your loan, some to third parties who verify the property (appraiser, title company), and some to the government for recording the sale.

Your total closing costs appear as the "Cash to Close" figure on page 1 of your Loan Estimate. That number rolls together your closing costs, your down payment, and any credits or prepayments. It is the actual cash you bring to the closing table.

Fannie Mae puts the typical range at 2% to 5% of your loan amount. Where you land in that range depends on your state, your loan type, and how aggressively you shop and negotiate. The table below shows what that looks like at common loan sizes.

Example ranges only. Your actual costs depend on your lender, location, and loan type. Source: Fannie Mae Closing Costs Calculator.

Closing costs fall into a few groups. Knowing which group a fee belongs to tells you instantly whether you can shop it, negotiate it, or just pay it. Page 2 of your Loan Estimate lays them out the same way.

The fees you have real power over are the lender fees in Section A and the shopping fees in Section C. Most buyers focus their energy there.

Lender fees are the charges the lender keeps for originating your loan — the cost of underwriting, processing, and finalizing the mortgage. They all appear in Section A: Origination Charges on page 2 of your Loan Estimate. This is the one section the lender fully controls, which makes it the one section where you have the most room to negotiate.

Common lender fees you'll see:

• Origination fee — the lender's core charge for setting up the loan, often stated as a percentage (typically up to 1% of the loan). The most negotiable line item on the whole estimate.
• Underwriting / processing fee — a flat charge for reviewing your application and documents. Can be real, but two separate "processing" and "underwriting" charges for the same work is a common duplicate.
• Application or document-prep fee — a flat fee that often covers no distinct service. Frequently a junk fee worth challenging.
• Rate-lock fee — charged to hold your rate. Many lenders waive it; ask to have it removed.
• Discount points — optional upfront payments that buy your rate down. These are a real choice, not a fee to remove — but only worth it if you keep the loan long enough to break even.

The Loan Estimate is the standardized form every lender must send you within three business days of your application. Page 2 is where every closing cost lives, sorted into labeled sections. Read it line by line:

The single most useful habit: get Loan Estimates from at least two lenders and compare the Section D totals. The difference is often thousands of dollars for the same loan.

Not every fee moves, but the ones that do are worth real money. Here's the realistic picture:

1. 1Shop at least two Loan Estimates. Compare Section D totals side by side. Same loan, thousands of dollars apart.
2. 2Challenge every Section A fee. Ask the loan officer to waive or reduce the origination, application, and document-prep fees — especially vague or duplicated ones.
3. 3Shop your own title insurer. Section C fees vary widely by provider; the lender's default pick is rarely the cheapest.
4. 4Ask for lender credits. In exchange for a slightly higher rate, some lenders credit cash back at closing to offset fees — useful if cash now matters more than rate.
5. 5Put it in writing. A short, specific counter-offer email naming the exact line items gets taken far more seriously than a phone call. It also creates a record.