Phone: (866) 688-9020

1906 W. Garvey Ave S. Suite 200 West Covina, CA 91790

Closing Costs and Fees: What to Expect and How Much Does It Cost?

Buying a home is an exciting and often life-changing experience. You’ve found the perfect house, negotiated the price, and secured your mortgage. But before you can move in, you’ll encounter one more financial hurdle: closing costs and fees. Understanding what these costs entail and how much they can add up to is crucial for a smooth homebuying process.

What Are Closing Costs?

Closing costs are the various fees and expenses associated with finalizing the purchase of a home. They cover a wide range of services and paperwork that facilitate the transfer of property ownership from the seller to the buyer. These costs are typically paid at the closing of the real estate transaction, which is when the property officially changes hands.

Common Components of Closing Costs

  1. Loan Origination Fees: This is the fee charged by your lender for processing your mortgage application. It typically ranges from 0.5% to 1% of the loan amount.
  2. Appraisal Fees: Lenders often require an appraisal to ensure the property’s value aligns with the loan amount. Appraisal fees vary but can range from $300 to $500.
  3. Credit Report Fees: Lenders will pull your credit report as part of the application process, which can cost around $30 to $50.
  4. Title Search and Title Insurance: These fees ensure that there are no outstanding liens or claims on the property. Costs vary by location but can be around 1% of the home’s purchase price.
  5. Home Inspection Fees: While not always mandatory, a home inspection is highly recommended. The cost can range from $300 to $500, depending on the size and complexity of the property.
  6. Recording Fees: These fees cover the cost of recording the property’s deed and mortgage in the public records. Prices vary by location.
  7. Property Taxes: Depending on the time of year you close, you may need to pay property taxes upfront.
  8. Escrow Fees: This fee is paid to the escrow company responsible for holding and disbursing funds during the closing process. It’s usually around 1% of the home’s purchase price.
  9. Attorney Fees: Some states require an attorney to be present at closing, while in others, it’s optional. Legal fees can range widely.
  10. Miscellaneous Fees: There may be other miscellaneous costs associated with the closing process, such as courier fees, notary fees, and document preparation fees.

How Much Do Closing Costs Typically Add Up To?

The total amount of closing costs can vary significantly based on factors like location, the price of the property, and the specific services you choose. On average, however, closing costs typically amount to 2% to 5% of the home’s purchase price. For a $300,000 home, this could mean $6,000 to $15,000 in closing costs.

It’s essential to get a Loan Estimate from your lender, which outlines the expected closing costs, within three days of applying for your mortgage. This will give you a clearer picture of what to expect.

Ways to Minimize Closing Costs

While closing costs are a necessary part of the homebuying process, there are some strategies to help minimize their impact:

  1. Shop Around for Lenders: Different lenders offer varying fee structures and rates. Get multiple quotes to find the best deal.
  2. Negotiate with the Seller: In some cases, you may be able to negotiate with the seller to cover some of the closing costs.
  3. Consider a No-Closing-Cost Mortgage: Some lenders offer “no-closing-cost” mortgages, where they roll the closing costs into the loan amount or charge a slightly higher interest rate.
  4. Check for Special Programs: There are programs and grants available, especially for first-time homebuyers, which can help cover some closing costs.

Preparing for Your Closing Costs

To ensure you’re financially ready for the closing costs, it’s important to budget for them. Set aside a portion of your savings to cover these expenses so that they don’t catch you off guard. Your real estate agent and lender can also provide guidance on what to expect.

Understanding Your Closing Disclosure

Before the closing date, you’ll receive a Closing Disclosure from your lender, which outlines all the costs associated with the purchase of your home. Review this document carefully and compare it to the Loan Estimate you received when applying for your mortgage. Make sure you understand and are comfortable with the costs before proceeding to the closing.


Closing costs and fees are a part of the homebuying process that every potential homeowner needs to be aware of. They can add a substantial amount to the overall cost of purchasing a home, so understanding what they are and how to minimize them is crucial. By being informed and prepared, you can navigate the closing process with confidence and make your transition into your new home as smooth as possible.

Don’t let the prospect of closing costs deter you from your dream of homeownership. With careful planning and consideration, you can manage these expenses and enjoy the many benefits of owning your own home.

For more information and assistance with your mortgage needs, contact O1NE MORTGAGE at (866) 688-9020. We’re here to help make your dream of homeownership a reality, offering a range of mortgage options and expert guidance tailored to your unique situation. Don’t hesitate to call us for a personalized consultation. Your new home is just a phone call away.

Share on your timeline
Send to email

Fill in the form below and one of our representatives will contact you.

Contact Information

(866) 688-9020

Opening Hours

Monday – Friday 9am-5pm 
Weekend – Closed


1906 W Garvey Ave Suite 200 West Covina CA 91790