Direct answer: Closing costs run about 2–5% of the price —
$7,000–$17,500 on a $350,000 home — split among lender fees
(~0.5–1%), third-party services (appraisal, title, ~1%), government charges
(recording, transfer tax — $0 to 4% by state), and prepaids (insurance, taxes,
interest). Your Loan Estimate marks which services you may shop — those and the
lender's own fees are where negotiation works.
The four buckets on your Loan Estimate
- A — Lender charges: origination, underwriting, points if any. Fully competitive: this bucket is why you get multiple quotes.
- B/C — Services: appraisal (fixed by lender), then title insurance, settlement, survey — section C is legally shoppable, and title premiums vary hundreds between agencies for identical coverage. In some states title is price-regulated; in the rest, shop it.
- E — Government: recording fees and transfer taxes. Not negotiable with the government — but WHO pays transfer tax is contract-negotiable in many states, and the state spread is wild (nothing in Texas/Missouri; ~4% in Delaware; graduated in Washington). Each of our state pages notes the local rule.
- F/G — Prepaids & escrow seed: first-year insurance, months of property tax, per-diem interest. Not fees at all — your own future bills, front-loaded. Biggest single "surprise" for first-timers (full checklist: first-time buyer costs).
How to actually pay less
- Compete lenders on the same day (rates move daily) and compare section A + rate together — a low fee with a high rate is just points in disguise (points math).
- Shop section C — title/settlement quotes take one email each and routinely save $500+.
- Ask for seller credits in soft markets — 2–3% toward closing is a normal ask that lowers cash-to-close without touching the price much.
- Consider lender credits if cash is the constraint: a slightly higher rate that erases fees can be optimal for shorter stays.
- Refi note: the same anatomy applies to refinances, where costs gate the whole decision — see the break-even guide.
The comparison ritual
Loan Estimates are standardized precisely so you can lay two side by side: same rate? compare A+B+C totals. Different rates? divide the fee difference by the monthly-payment difference (our points calculator does this) to find the break-even. Ten minutes of this ritual is worth more per hour than almost anything else in the purchase.