What Are Closing Costs? Budgeting for the Final Step in Homeownership

What Are Closing Costs?

Closing costs are the final expenses you’ll pay before officially owning your home. They typically range from 1.5% to 3% of the purchase price and cover a variety of services that make the transaction legal, secure, and complete.

What Do Closing Costs Include?

While costs vary by location and loan type, they often include:

• Title search and insurance

• Appraisal and inspection fees

• Loan origination and underwriting fees

• Escrow and recording fees

• Attorney or notary fees (where applicable)

• Prepaid taxes and homeowner’s insurance

How to Plan for Closing Costs?

If you’re buying a $400,000 home, expect to budget between $6,000 and $12,000 for closing costs. But here’s the good news: there are smart ways to manage or reduce these expenses.

Ways to Reduce or Cover Closing Costs

• Seller Concessions: You can negotiate with the seller to cover part or all of your closing costs.

• Lender Credits: Some lenders offer credits in exchange for slightly higher interest rates.

• Down Payment Assistance Programs: Many states and local governments offer grants or loans to cover closing costs.

• Roll Into Your Loan: Certain loan programs allow you to finance closing costs into your mortgage.

Check out down payment and closing cost assistance programs in Texas

“Closing costs shouldn’t be a surprise—they should be part of a clear, confident plan. We walk every client through the numbers so they know exactly what to expect and how to prepare.”
— Stephen Savant, CEO of Savant Mortgages

🏡 Bottom Line: You are prepared and won't be surprised.

Closing costs are a necessary part of buying a home—but they don’t have to be overwhelming. With the right guidance, you can plan ahead, explore assistance options, and even negotiate to reduce your out-of-pocket expenses.

Ready to see your closing cost estimate? Book a free consultation with us and let’s build your budget with confidence.