Question 1

What are the biggest closing cost line items?

Accepted Answer

The largest items are typically: lender origination fee (0–1% of loan), title insurance (~0.5%), prepaid homeowner's insurance (~$1,000–2,000), property tax escrow (2–6 months of taxes), appraisal ($400–800), and government recording fees ($200–500). Attorney fees apply in attorney-state closings.

Question 2

Which closing costs are negotiable?

Accepted Answer

Lender fees are the most negotiable — origination fee, discount points, processing, and underwriting. Get Loan Estimates from 3+ lenders and compare Section A (origination charges) carefully. Third-party fees like title insurance and appraisal are harder to negotiate but you can sometimes choose your own providers.

Question 3

Can I roll closing costs into the loan?

Accepted Answer

Yes — on refinances, closing costs can typically be rolled into the new loan balance. On purchases, you can't simply add them to the loan, but you can ask the seller for concessions (seller-paid closing costs), negotiate lender credits in exchange for a slightly higher rate, or use down payment assistance programs that cover costs.

Question 4

Who pays closing costs — buyer or seller?

Accepted Answer

Buyers typically pay the majority of closing costs. Sellers pay real estate commissions (3–6% of price) and sometimes buyer closing cost concessions. FHA allows sellers to pay up to 6% of the purchase price toward buyer costs; conventional loans allow 3–9% depending on down payment.

Question 5

What are prepaid items vs closing costs?

Accepted Answer

Closing costs are one-time fees. Prepaid items are money collected upfront to fund your escrow account — they're not fees, just money you'd be paying later anyway. Prepaids typically include your first year's homeowner's insurance, 2–6 months of property taxes, and the first month's interest (paid upfront since you skip a month before your first payment).

What Are Closing Costs? Every Fee Explained

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