Budget 2-3% of the purchase price for closing costs, in addition to your down payment.
Lender Fees
- Loan origination: 0-1% of loan amount
- Appraisal: $600-$900
- Credit report: $30-$50
- Underwriting fee: $400-$600
Title & Escrow
- Title insurance (lender's policy): Required, ~$500-$1,000
- Title insurance (owner's policy): Recommended, ~$1,000-$2,000
- Escrow fee: $1,500-$2,500
- Recording fees: $150-$300
Prepaid Items
- Property taxes: Prorated for remainder of tax period
- Homeowner's insurance: First year paid at closing
- Interest: Prorated from closing to first payment
Example: $900,000 Home
| Item | Estimated Cost | |------|---------------| | Loan origination (0.5%) | $3,600 | | Appraisal | $750 | | Title insurance | $2,500 | | Escrow | $2,000 | | Recording | $200 | | Prepaid taxes (2 months) | $2,000 | | Prepaid insurance | $2,000 | | Total | ~$13,050 |
Ways to Reduce
- Negotiate seller credits
- Take lender credit (higher rate, lower costs)
- Shop title companies