What Are Typical Closing Costs for a Buyer? Real Numbers by Price and State

Closing costs are the second-biggest financial surprise in the homebuying process, right after the down payment. But unlike the down payment — where you at least know roughly what 10% or 20% looks like — most first-time buyers have no real number in their head for closing costs until the Loan Estimate lands in their inbox.

Here is what typical closing costs actually look like for buyers, broken down by purchase price, state, and loan type.

The Short Answer: 2–5% of the Purchase Price

The standard guidance is that closing costs for buyers run 2–5% of the purchase price. In reality, most conventional buyers with average state transfer taxes land between 2.5% and 3.5%.

These are buyer-only closing costs, separate from the down payment. Total cash needed at closing equals your down payment plus your closing costs, minus any seller concessions or lender credits.

What Drives the Range

The single biggest variable in buyer closing costs is state and local transfer taxes, which range from $0 (in states like Texas, Alaska, and Wyoming) to 3–4% of the purchase price in states like Delaware and parts of New York.

Other factors that push your closing costs up or down:

Loan type: FHA loans add a 1.75% upfront mortgage insurance premium, which gets wrapped into the loan amount or paid at closing. A $300,000 FHA loan carries $5,250 in upfront MIP on top of standard fees. VA loans substitute a funding fee (1.4%–3.6% depending on whether it's your first use and your down payment amount), but VA buyers pay no monthly mortgage insurance. USDA loans have a 1% upfront guarantee fee.

Origination fees: Some lenders charge 0.5%–1% of the loan amount as an origination fee; others charge nothing. On a $400,000 loan, that difference is $2,000–$4,000.

Title insurance: Required lender's policy plus an optional owner's policy together add 0.5%–1.0% of the purchase price in most states. In rate-regulated states (Texas, Florida), the rate is fixed by law and the math is straightforward.

Location within a state: County-level taxes and recording fees vary. New York City buyers pay additional transfer taxes beyond the state rate. Chicago buyers pay additional Cook County transfer taxes. Philadelphia buyers pay more than buyers elsewhere in Pennsylvania.

Typical Closing Costs by State

These are estimates for a buyer using a conventional loan with 10% down in each state. Transfer tax assumptions are included.

Typical Closing Costs by Loan Type

Conventional Loan

The baseline scenario. If you're putting 10% or more down, you're looking at the "pure" closing cost stack with no government-mandated insurance premiums distorting the number.

Typical conventional buyer closing costs: 2%–3.5% of purchase price

Example ($400,000 home, $360,000 loan, Ohio):

• Lender fees (no origination): $500
• Title insurance (lender + owner's, simultaneous issue): $2,100
• Settlement fee: $650
• Recording + transfer taxes: $300
• Homeowners insurance (12 months): $1,800
• Prepaid interest (mid-month closing): $900
• Property tax escrow (2.5 months): $1,250
• Total: ~$7,500 (1.9% of purchase price)

FHA Loan

FHA loans are popular for first-time buyers because of the lower credit score and down payment requirements (3.5% minimum down), but they carry an upfront mortgage insurance premium of 1.75% of the base loan amount.

On a $300,000 FHA loan: 1.75% × $300,000 = $5,250 in upfront MIP, paid at closing or financed into the loan.

Typical FHA closing costs (including upfront MIP): 3.5%–5% of purchase price

The upfront MIP is the main reason FHA closing costs are higher. The rest of the fee structure is similar to a conventional loan.

VA Loan

VA loans have no monthly mortgage insurance, but they come with a VA funding fee — a one-time charge that replaces PMI and helps fund the VA loan program.

Funding fee rates for first-time VA use:

• 0% down: 2.15% of loan amount
• 5% or more down: 1.5% of loan amount
• 10% or more down: 1.25% of loan amount

Subsequent VA loans have a higher funding fee. Veterans with service-connected disabilities are exempt from the funding fee.

Typical VA closing costs (including funding fee): 2%–4% of purchase price

VA loans also prohibit buyers from paying certain fees (like the lender's attorney fee or real estate commission), which can offset some of the funding fee.

USDA Loan

For rural and some suburban buyers, USDA loans offer 0% down payment. The upfront guarantee fee is 1% of the loan amount.

Typical USDA closing costs: 2%–4% of purchase price

USDA closing costs can be financed into the loan if the appraised value supports it — a meaningful advantage for buyers with little cash at closing.

What's Not Included in These Numbers

A few costs are typically paid before closing day and are separate from the closing costs on your Closing Disclosure:

• Home inspection: $300–$600, paid to the inspector at the time of inspection
• Appraisal fee: $400–$700, usually charged to your credit card when ordered (weeks before closing)
• Radon, mold, or pest inspection: $100–$300 each, if applicable

These come out of your pocket during the due diligence period, not at the closing table.

How to Reduce What You Pay

Seller concessions: Ask the seller to contribute toward your closing costs. On a $400,000 purchase, requesting $5,000–$8,000 in seller-paid closing costs is reasonable in most markets. The limits are 3%–6% depending on loan type.

Lender credits: Accept a slightly higher rate in exchange for a credit toward closing costs. This makes sense if you plan to sell or refinance within a few years and won't recoup the interest cost.

Shop title services: Section C of your Closing Disclosure lists services you can shop for. Title insurance and settlement fees can vary by $300–$700 between providers. Getting one competing quote from a local title company often pays off.

Close late in the month: Closing on the 27th instead of the 5th reduces prepaid interest — sometimes by $1,000+ depending on your loan size and interest rate.

The Most Accurate Way to Know Your Number

The 2–5% rule is useful for planning before you make an offer. The definitive number comes from your Loan Estimate, which your lender must provide within 3 business days of your loan application.

Getting multiple Loan Estimates before committing to a lender is one of the most effective ways to reduce closing costs. Lender fees (Section A) are where costs vary most between lenders — the transfer taxes, recording fees, and prepaids will be essentially identical across quotes.

The Closing Cost Guide at firsthometoolkit.com/closing-cost-guide/ includes a lender comparison worksheet covering every line on the Loan Estimate, a state-by-state transfer tax reference, and a negotiation script for common "junk fees" in Section A — so you're comparing quotes on the same basis and not leaving money on the table.