Closing costs on a home purchase typically run 2 to 5 percent of the loan amount, meaning roughly $7,000 to $17,500 on a $350,000 purchase. That range covers lender fees, third-party services like the appraisal and title work, prepaid items like insurance and taxes, and government recording fees. Here is exactly what makes up that number and where you actually have room to negotiate.
The main categories of closing costs
Lender fees
These include an origination fee, underwriting fee, and any discount points you choose to pay to lower your rate. This is one of the areas where shopping multiple lenders can produce real savings, since these fees vary meaningfully from one lender to the next.
Third-party fees
This category includes the appraisal, the credit report, title search and title insurance, and a survey if required. These fees go to outside companies rather than the lender, and while you often cannot negotiate the fee itself, you may be able to choose which provider is used for some of them, such as title insurance in states where that is allowed.
Prepaid items
These are not technically costs, but money you are paying in advance: the first year of homeowners insurance, a few months of property taxes and insurance to fund your escrow account, and prepaid interest for the days between closing and your first payment. This category often surprises buyers the most because it feels like it appears out of nowhere, even though it is genuinely your money going into your own accounts, not a fee you are losing.
Government recording fees and transfer taxes
Local governments charge a fee to record the deed and mortgage, and some states and counties add a transfer tax on the sale itself. These are typically smaller line items but are non-negotiable, since they are set by the local jurisdiction.
A worked example
On a $350,000 home with a $332,500 loan after 5 percent down, closing costs might break down roughly as follows: lender fees around $3,500, appraisal and credit report around $700, title work around $1,800, prepaid taxes and insurance around $3,500, and recording fees around $500, for a total near $10,000. The exact numbers shift based on your loan amount, your lender, your county, and whether you negotiate any seller-paid closing costs into your purchase agreement.
Sellers can often be asked to contribute toward your closing costs as part of the purchase negotiation, particularly in a market that favors buyers. This is worth discussing with your agent before you write an offer, not after.
Common mistakes buyers make with closing costs
- Only budgeting for the down payment. Closing costs are a separate, additional amount of cash needed at the table, and forgetting to plan for both can create a last-minute scramble.
- Not asking for seller-paid closing costs. Many buyers never ask, and in markets where sellers have room to negotiate, this can meaningfully reduce out-of-pocket cash.
- Shopping only for the lowest rate and ignoring the fees. A slightly higher rate with meaningfully lower fees can sometimes be the better overall deal, especially if you do not plan to keep the loan for decades.
Georgia considerations
Georgia charges a modest intangible tax and recording fees tied to your loan amount, and because Georgia is an attorney closing state, a real estate attorney's fee is typically part of the closing cost total as well, usually a smaller line item than people expect. None of this changes the overall closing cost range meaningfully, but it explains a couple of the specific line items you will see on a Georgia closing disclosure.
Frequently asked questions
On a purchase, generally no, closing costs are typically paid separately from the loan amount, though seller contributions can offset them. On a refinance, closing costs can often be rolled into the new loan balance.
Yes, this is a normal part of purchase negotiations in many markets, often called a seller concession. There are limits based on your loan program and down payment, which your agent and lender can walk you through.
Lender fees, meaning origination and underwriting charges, vary by lender, while most third-party fees stay roughly consistent regardless of who you choose. Shopping lenders is where the real savings potential exists.
Want an accurate closing cost estimate for your specific situation? Send me your target price range and I will build a real number instead of a rough percentage.
This article is general education, not a commitment to lend or an offer of credit. Program availability, terms, rates, and qualification guidelines vary by lender and are subject to change; all loans are subject to underwriting and final approval. Market figures are approximate and change over time. For guidance specific to your situation, reach out directly. Garrett Potz, NMLS #631592 · Affinity Home Lending, Company NMLS #1181151 · Equal Housing Lender.