Real Estate Closing Costs: What Are They and How Much Do They Cost?

By
Mortgage and Lending with ChangeMyRate.com® A Mortgage Corporation NMLS #1326269

Closing costs are the fees you pay when finalizing a real estate transaction, whether you’re refinancing a mortgage or buying a new home. These costs can amount to 2 to 5 percent of the mortgage balance so it’s important to be financially prepared for this expense.

What are closing costs?

Closing costs include a range of charges for services related to applying for a mortgage. Some of the costs are related to the property — appraising it to verify its value and searching property records to ensure a clear title — and others are related to the paperwork involved, including attorney fees and the expense of originating and underwriting the loan.

Closing costs are separate from the down payment, and you usually need a cashier’s check (not a personal check) to pay them.

How much are closing costs?

The total tab for your closing costs depends on three key factors:

  • The price of the home
  • Its location
  • Whether you’re buying or refinancing

As of the first half of 2021, the average closing costs for buying a single-family home were $6,837, according to real estate data firm ClosingCorp. The average closing costs for a refinance came in at $2,398.

For more information about real estate closing costs and how to buy a house, Read The SCOOP! Blog

 

Comments (3)

Bill Salvatore - East Valley
Arizona Elite Properties - Chandler, AZ
Realtor - 602-999-0952 / em: golfArizona@cox.net

Great information.  Thanks for sharing and have a wonderful day! bill

Apr 24, 2022 11:25 AM
Jackie A. Graves

Hi Bill, Thanks for your comment. Very much appreciated. Stay tuned for future posts and make it a great day.

Apr 24, 2022 12:18 PM
Adam Feinberg
Elegran - Manhattan, NY
NYC Condo, Co-op, and Townhouse specialist

Closing costs in my market are the highest in the nation by a mile- so it is something I have to discuss early in the search process. The mansion tax starts at $1m purchases- at 1% of the purchase price...but that could easily be a 2 room studio apartment for the mansion tax. The mansion tax is a graduated rate- and can reach as high as 3.9% of the purchase price for luxury market homes.  NYC and NY State Transfer taxes could easily exceed 2% of the purchase price...and these are just a portion of the closing costs in NYC. 

Apr 24, 2022 11:42 AM
Jackie A. Graves

Hi Adam, Thanks for your comment. Very much appreciated. Stay tuned for future posts and make it a great day.

Apr 24, 2022 12:31 PM
Richard Weeks
Dallas, TX
REALTOR®, Broker

Great information, thanks for sharing.  I hope you have a great day.

Apr 25, 2022 02:57 AM
Jackie A. Graves

Hi Richard, Thanks for your comment. Very much appreciated. Stay tuned for future posts and make it a great day.

Apr 25, 2022 01:02 PM