Average Closing Costs
The national average hides wide variation. Here is the breakdown.
Average buyer closing costs run 2 to 5 percent of the purchase price. On a $350,000 home with 10 percent down and a conventional loan, typical line items sum to about $5,400: $3,150 origination, $350 appraisal, $1,750 title insurance, and $150 recording, or 1.54 percent. FHA loans run higher: a $300,000 purchase at 3.5 percent down estimates about $9,961, or 3.32 percent, driven by the 1.75 percent upfront mortgage insurance premium.
The 2 to 5 percent rule
The rule exists because most buyer costs scale with price or loan size. A bigger loan means bigger origination; a bigger price means bigger title insurance. Flat fees like the $350 appraisal matter less as price rises.
Low-down-payment conventional loans land near the low end around 1.5 to 2.5 percent, while FHA and VA loans land higher because of their upfront government fees.
Line by line
Origination (1 percent of loan) is usually the largest lender line. Title insurance at 0.5 percent of price is the largest third-party line. Appraisal, credit report, and recording fees are smaller flats.
Prepaids sit alongside: homeowner's insurance premium, prepaid interest from closing to month-end, and initial escrow deposits. These are not fees exactly, but they are cash due at closing.
What pushes costs up or down
Discount points push costs up in exchange for a lower rate; lender credits push them down in exchange for a higher rate. Shopping lenders is the single biggest lever most buyers never pull.
State transfer taxes and title regimes move the total by thousands. Cash purchases drop the loan lines entirely.
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Average closing costs questions
What are average closing costs on a $350,000 home?
With 10 percent down on a conventional loan, typical line items sum to about $5,400: $3,150 origination, $350 appraisal, $1,750 title, $150 recording. FHA and VA loans add government fees that push the total higher.
Why do closing costs vary so much?
The loan program sets the government fees, the state sets transfer taxes and title rules, the lender sets origination and points, and your choices on rate-versus-fees tradeoffs move thousands in either direction.
Are closing costs higher on expensive homes?
Origination and title insurance scale with loan and price, so dollar costs rise with expensive homes. As a percentage of price, the total stays in the same 2 to 5 percent band.