What closing costs cover
Closing costs fall into four groups: lender fees for processing and underwriting the loan, title and settlement charges, government recording and transfer taxes, and prepaid items such as interest, insurance and the first months of property tax escrow. Prepaids are not fees as such; they fund accounts you would pay into anyway.
| Category | Typical range | Negotiable? |
|---|---|---|
| Lender fees | 0.5% – 1.5% of loan | Yes, compare lenders |
| Title & settlement | 0.5% – 1.5% of price | Often, shop where allowed |
| Taxes & recording | Varies by state | No |
| Prepaids | 0.5% – 1.5% of price | Partly, via closing date |
State differences
Transfer taxes, title insurance pricing and attorney requirements vary widely. In ClosingCorp's state averages, including transfer taxes (2021 data, the latest published), Washington DC is highest at about 6.25% of the price, followed by Delaware (3.8%), New York (3.4%), Maryland (2.9%), Washington (2.8%) and Illinois (2.7%). Texas averages about 2.25% and California about 1.2%. This calculator scales title, settlement and recording fees using those state figures; states without published data use the Texas baseline. Prepaids such as insurance and tax escrow are added separately.