How Much Are Closing Costs on a $400,000 House?

If you are under contract on a $400,000 home, your closing costs will likely fall somewhere between $8,000 and $22,000 depending on where the property is located and which loan program you are using. That is a wide range, and it is wide for a reason: the biggest single variable is your state's transfer tax or stamp duty, which can swing total closing costs by $6,000 or more all by itself.

Here is what drives the number and what it typically looks like state by state.

The Two Categories of Closing Costs

Before looking at specific figures, it helps to separate closing costs into two buckets:

Lender and service fees — These are largely consistent regardless of where you buy. They include the origination charge, appraisal, credit report, title search, title insurance, and the settlement or escrow fee. On a $400,000 purchase, expect these to total roughly $5,000 to $8,000.

State and local government fees — Transfer taxes, recording fees, and mortgage recording taxes. These vary enormously. In Wyoming or Texas, you pay almost nothing here. In Pennsylvania or Connecticut, these fees can add $8,000 to $10,000 on their own.

When you hear someone say "closing costs are 2% to 5% of the purchase price," they are describing the combined total of both categories. On a $400,000 home, 2% is $8,000 and 5% is $20,000.

Closing Cost Estimates by State on a $400k Purchase

The estimates below reflect buyer-side closing costs in 2024–2025, including lender fees, title/settlement, and state transfer or recording taxes. They assume a conventional loan with roughly 10–20% down and do not include prepaid interest or escrow reserves for taxes and insurance (which add another $3,000–$6,000 depending on property tax rates and insurance costs).

A few things to note. First, "attorney states" (New York, Georgia, South Carolina, Massachusetts, Delaware, Connecticut) require a licensed real estate attorney to conduct the closing. This adds a professional fee — usually $800 to $1,500 — that other states do not have. Second, in some states the transfer tax is conventionally paid by the seller rather than the buyer, so your actual out-of-pocket may be lower than the state's headline rate suggests. Your real estate agent will know the local convention.

New Construction vs. Resale

If you are buying a newly built home rather than an existing home, a few things change. Builders sometimes offer to pay closing costs as an incentive, particularly if you use their preferred lender. However, preferred lender arrangements come with tradeoffs: the rate may be higher, or the incentive may be contingent on accepting their terms. Run the numbers both ways.

On a new build, you will also face HOA capital contributions or community development charges in some markets, which can add $1,000 to $3,000 to your total. These are listed in Section H of the Closing Disclosure.

Prepaids: The Number That Surprises Everyone

The state-by-state table above deliberately excludes prepaids because they are not really "closing costs" in the sense that you are paying fees for services. Prepaids are:

• Prepaid interest: Interest on your loan from the closing date to the end of that month. If you close on the 5th, you prepay 25–26 days of interest. On a $320,000 loan at 7%, daily interest is around $61. Closing on the 5th means roughly $1,500 in prepaid interest.
• Homeowner's insurance: Most lenders require 12 months paid upfront plus 2 months deposited into escrow. A typical annual premium might be $1,500 to $2,500.
• Property tax escrow: Usually 2 to 3 months of estimated property taxes deposited into an escrow account. On a $400,000 home in a high-tax state, this could be $2,000 to $4,000.

Add these to your lender and government fees, and your total "cash to close" is usually your closing costs plus prepaids plus your down payment.

How to Reduce What You Pay

Shop lender fees. Section A of your Loan Estimate (origination charges) is the most negotiable part of your closing costs. Get three Loan Estimates from different lenders on the same day and compare only Section A — these fees are zero tolerance (they cannot increase). The other sections are largely identical across lenders because they are driven by the property's location, not the lender.

Request seller concessions. If you are in a buyer's market or the property has been sitting, asking the seller for a credit toward closing costs is straightforward. On a $400,000 home with a conventional loan and less than 10% down, the cap is 3% ($12,000) — more than enough to cover most fees.

Close late in the month. Closing on the 28th instead of the 5th eliminates most of your prepaid interest. On a $320,000 loan at 7%, that saves roughly $1,400 in cash at closing.

Compare title companies. In states that do not have promulgated title rates, you can shop for title insurance and settlement services. The title company your lender suggests is often affiliated with the lender. A competing quote from an independent title company can save $400 to $800.

Knowing which fees are fixed and which are negotiable before you get to the closing table makes the difference between a smooth closing and a last-minute scramble for cash. The Closing Cost Guide provides a line-by-line breakdown of every fee category on the Closing Disclosure, along with a comparison worksheet for shopping lenders and a state-by-state reference for transfer taxes.