Closing costs can be a significant expense when buying a home or refinancing, but there are steps you can take to make the cost more manageable. In addition to shopping around for the best loan, you can shop around to get the best price for some of your closing costs.
Closing costs are fees that you will pay to your lender and other real estate professionals on closing day. In total, these fees typically range from 2% to 5% of your loan amount.
In addition to your down payment, closing costs are a major upfront expense that you will need to budget for when you start your homebuying journey, but there are steps you can take to help lower what you owe at the closing table.
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Do your research when choosing your lender.
Comparing loan estimates from multiple lenders can help ensure that you are getting the best interest rate and terms available. When you’re reviewing loan estimates, you should also pay close attention to the fee structures and any other items that you will need to pay for on closing day.
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Negotiate fees where possible.
Once you have chosen your lender, you can approach them about negotiating the fees included in your loan estimate, such as origination fees and processing fees. In many cases, financing charges are open for discussion and you may be able to get your lender to reduce or waive certain fees.
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Shop around for closing services.
In addition to fees from your lender, you should expect to pay for additional closing services, such as title insurance, home inspections and appraisals. While your homebuying team may have a set a of professionals they prefer to work with for these services, you can shop around for more cost-effective options to help lower your closing costs.
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Take advantage of financial aid programs.
There are many programs designed to help homebuyers cover down payments and closing costs, especially if you are a first-time homebuyer. Talk to your homebuying team to determine if you qualify for any financial assistance.
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Ask about seller concessions.
When it comes time to negotiate your offer with the seller, you may be able to ask them for some relief on your closing costs. For example, the seller may agree to cover some or all of the closing costs as an incentive to get the deal done — however, this is more likely to happen in a buyer’s market.
In addition to these tips, your lender should help you determine if there are other opportunities to reduce your closing costs. For example, if you are refinancing your mortgage, you may be able to save time and money on items like appraisals and income verification.
Last reviewed: June 16, 2025
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