Now that you’ve decided to buy a home and are ready to make it happen, it’s a good idea to plan ahead for the costs that are a typical part of the homebuying process. And while your down payment is probably the number one expense on your mind, don’t forget about closing costs. Here’s what you need to know.
What Are Closing Costs?
Simply put, your closing costs are the additional fees and payments you have to make at closing. These costs will vary based on the price of the home and how it’s being financed. According to Freddie Mac, closing costs typically include:
- Application fees
- Credit report fees
- Loan origination fees
- Appraisal fees
- Home inspection fees
- Title insurance
- Homeowners insurance
- Survey fees
- Attorney fees
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Some of these are one-time expenses that are included in your closing costs. Others, like homeowners insurance, are initial installment payments for ongoing responsibilities you’ll have once you own the home.
Quick Tip
Get a more in-depth look at closing costs in our article How to Read Your Closing Disclosure.
How Much Are Closing Costs?
The same Freddie Mac article goes on to say, “Closing costs vary greatly depending on your location and the price of your home. Typically, you should be prepared to pay between 2% and 5% of the home purchase price in closing fees.”
Let’s say you find a home you want to purchase at $400,000. Based on the 2-5% Freddie Mac estimate, your closing fees could be between roughly $8,000 and $20,000. Keep in mind, if you’re in the market for a home above or below this price range, your numbers may be higher or lower.
Quick Tip
Saving up for the down payment and closing costs on a future home? Check out Five Ways to Simplify Your Finances.
Ways to Reduce Closing Costs
If you’re wondering if there’s any way to reduce your closing costs, here are a few things that could help:
Negotiate with the Seller: Some sellers are willing to cover part or all of these expenses, especially since homes are staying on the market a bit longer now. Sellers may be more motivated to compromise, and you’ll find you may have a bit more negotiation power. So don’t hesitate to ask for concessions like giving you a credit toward closing costs.
Shop Around for Home Insurance: Since rising home insurance is a challenge in many areas of the country right now, take the time to get a clear picture of all your options. Each insurance company offers their own policies and coverage, so get multiple quotes and see how they compare. Choosing a policy that provides reliable coverage at a competitive rate can help make a difference.
Look into Closing Cost Assistance: Just like there are programs out there to help with down payment assistance, options exist to get support with closing costs too. These programs vary by area, income levels, certain professions, and specific towns or neighborhoods. The U.S. Department of Housing and Urban Development (HUD) maintains a helpful resource for finding homebuying assistance programs in every state.
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Bottom Line
Planning ahead for closing costs can help make the homebuying process smoother. Understanding these expenses early gives you more time to budget and explore available options. With the right team on your side, you can make sure you’re prepared. Contact one of our licensed Mortgage Loan Originators to discuss your financial situation and financing options available to qualified borrowers.
About Acrisure Mortgage
Acrisure Mortgage (formerly FBC Mortgage, LLC) is a Top 10 national mortgage lender headquartered in Orlando, Florida. Licensed in 49 states and supported by more than 19,000 dedicated professionals across Acrisure, we specialize in residential mortgage lending through both retail and wholesale/correspondent channels. Our comprehensive offerings include purchase, refinance, construction and renovation loans—tailored to meet the unique needs of homebuyers, homeowners and partners nationwide.
We are proud to serve as a trusted partner to many of the nation’s largest homebuilders and real estate professionals, with a strong foundation of loyal, satisfied clients. Recognized for our commitment to service, innovation and operational excellence, Acrisure Mortgage has received numerous national accolades, including Top 50 Mortgage Companies, Best in Loan Delivery and Best Place to Work honors.
As part of the Acrisure family, we are backed by a global fintech leader that shares our values of innovation, integrity and service. Together, this empowers us to expand our capabilities, leverage world-class technology and resources, and grow alongside the clients and communities we serve.
All information presented is for educational purposes only and not intended as financial advice. NMLS ID#152859 EHL ©2026.
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