What do closing costs include?

They include lender fees (such as origination and underwriting), third-party fees (appraisal, title, and settlement), and prepaid or escrow items like homeowners insurance, property taxes, and prepaid interest. Mindy breaks each one down for you.

Are closing costs the same as the down payment?

No. Your down payment goes toward the purchase price and builds your equity, while closing costs are the fees to finalize the loan and transfer. You budget for both, though credits and gifts can reduce the cash you bring.

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What are closing costs and how much are they?

Q: How much are closing costs?

Closing costs typically run about 2% to 5% of the home price. On a $400,000 home that is roughly $8,000 to $20,000, depending on the loan, location, and your rate choices. Mindy provides a clear, itemized estimate up front so there are no surprises.

Q: Can the seller pay my closing costs?

Often, yes. Sellers can contribute toward your closing costs (called seller concessions), within limits set by your loan type. Lender credits and gift funds can also help cover them. Mindy will structure the offer to make the most of these options.

Closing costs are the fees to finalize your mortgage and purchase, and they typically run about 2% to 5% of the home price. They cover things like the appraisal, title, lender fees, and prepaid taxes and insurance. The good news: seller credits, lender credits, and gift funds can cover part or all of them. Here is what is included and how to lower the cash you bring.

By Mindy Hay, Senior Loan Officer · NMLS #292224 · Updated September 2026

What closing costs include

Closing costs fall into three buckets:

Type	Examples
Lender fees	Origination, underwriting, and processing
Third-party fees	Appraisal, title insurance, settlement, recording
Prepaids & escrow	Homeowners insurance, property taxes, prepaid interest

How much should you expect?

Plan for roughly 2% to 5% of the purchase price. On a $400,000 home, that is about $8,000 to $20,000, depending on your loan, location, and rate choices. You will get an itemized Loan Estimate early in the process, and Mindy walks you through every line so nothing is a surprise.

Who can pay your closing costs?

Seller credits: the seller can contribute toward your costs, within limits set by your loan type.
Lender credits: you can accept a slightly higher rate in exchange for credits toward costs.
Gift funds: many loan programs allow gifts from family toward closing costs.

How to lower them

A few moves can shrink your out-of-pocket cash: negotiate seller concessions in your offer, compare lender credit options, ask about any first-time buyer or assistance programs, and shop the third-party services you are allowed to choose. Mindy will help you use the right combination for your situation.

Closing costs vs. down payment

These are two different buckets. Your down payment goes toward the price and becomes your equity; closing costs are the fees to finalize the loan. You budget for both, but credits and gifts can reduce the total cash you need at the table.

Mindy Hay is a senior loan officer with Union Home Mortgage, based in Tigard and serving the greater Portland metro, Southwest Washington, and Arizona.

Frequently asked questions

How much are closing costs?

Typically 2% to 5% of the price. On a $400,000 home, roughly $8,000 to $20,000. Mindy gives you an itemized estimate up front.

What do they include?

Lender fees (origination, underwriting), third-party fees (appraisal, title, settlement), and prepaids (insurance, taxes, prepaid interest).

Can the seller pay them?

Often yes, through seller concessions, within limits set by your loan type. Lender credits and gift funds can also help.

Are they the same as the down payment?

No. The down payment goes toward the price; closing costs are the fees to finalize the loan.