How Much Are Closing Costs When Buying A House

Closing costs are also known as settlement fees. These fees need to be paid when real estate is conveyed from the seller to the buyer.

How Much Are Closing Costs On House Purchase

The average closing cost is $3,020. A normal range would fall between 2,700 and 4,000. Another practical estimate is about 3 to 5 percent of the loan amount.

New York is the most expensive state for closing costs, whereas Arkansas is the cheapest. The table below lists the highest and lowest closing costs across the United States.

Top 5 highest Closing Costs Top 5 Lowest Closing Costs
New York Arkansas
Texas North Carolina
Utah Iowa
California Montana
Alaska Winsconsin


Alabama $3512 Montana $3298
Alaska $4327 Nebraska $3608
Arizona $3950 Nevada $3471
Arkansas $3007 New Hampshire $3358
California – LA $4406 New Jersey $4110
California – SF $4566 New Mexico $3480
Colorado $3366 New York $5623
Connecticut $3391 North Carolina $3255
Delaware $3649 North Dakota $3800
Florida $3987 Ohio $3985
Georgia $3604 Oklahoma $4254
Hawaii $3442 Oregon $3333
Idaho $4077 Pennsylvania $4236
Illinois $3505 Rhode Island $3972
Indiana $3465 South Carolina $3552
Iowa $3261 South Dakota $3363
Kansas $3615 Tennessee $3483
Kentucky $3341 Texas $4708
Louisiana $3897 Utah $4605
Maine $3432 Vermont $3372
Maryland $3402 Virginia $3883
Massachusetts $4025 Washington $3607
Michigan $3804 Washington DC $3685
Minnesota $3920 West Virginia $3637
Mississippi $3335 Wisconsin $3303
Missouri $3356 Wyoming $3922
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Included In The Cost

These fees generally consist of 4 different settlement costs, being the lender fees that come with the mortgage loan, the government fees and taxes, 3rd party fees for inspection and certifications, and escrow and interest fees.

A typical ‘close’ faces the following fees:

  • Attorney fees
  • Title Service Costs
  • Recording Fees
  • Document or Transaction Stamps or Taxes
  • Survey Fee
  • Brokerage Commision
  • Mortgage Application Fees
  • Appriasal Fees
  • Inspection Fees
  • Home Warranties
  • Pre-paid Property Insurance
  • Pro-rata Property taxes
  • Pro-rata Homeowner Association Dues
  • Pro-rata Interest

Consider These Factors

These estimates are based on a $200.000 purchase mortgage for a house in the city by a borrower with 20% down payment and excellent credit rating.

It is difficult for buyers to know exactly which costs are mandatory and which are straight unnecessary. Lenders, brokers and other mortgage parties may try to overcharge a borrower by including a variety of fees in their services. Be warned for this malpractice.

Mortgage lenders are required by the Real Estate Settlement Procedures Act to provide you with a so called ‘good faith estimate’ to give you a better idea of the settlement costs you can expect to face. This GFE needs to be given to you within 3 business days of the submission of your loan application.

Tips Before Closing The Deal

  • Many fees and charges are negotioable with the lender, especially administration fees and the like.
  • When going over the closing fees, take special interest in fees called ‘administration’, ‘document preparation’, ‘payment processing’, or ‘funding and review’. These kind of fees are kind of arbitrary and the lender might be convinced to lower or completely get rid of these fees when you ask kindly.
  • You can save some handsome money by closing near the last day of the month, because escrow services can hold daily interest for every day from closing until the end of the month.
  • When the housing market favors the buying party, a buyer could ask the seller to pick up part of the closing costs, or even all of it.

If you want to read more about mortgage settlement costs, visit The US Federal Reserve Board.

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