From the RatesQ team · Sample question

What are typical closing costs on a $400,000 home?

This educational scenario and its sample explanations are not posts from real users.

My lender gave me a Loan Estimate with $11,200 in closing costs on a $400k purchase. That seems high. Is that normal? What's actually in there and can any of it be negotiated?

Quick Summary

  1. Closing costs include different categories of fees, prepaids and deposits.
  2. Compare itemized Loan Estimates for the same transaction.
  3. Cash to close also reflects the down payment, credits and amounts already paid.

Sample explanations

From the RatesQ team

$11,200 is about 2.8% which is within the normal range. The breakdown matters though. Look at the Loan Estimate carefully: Section A is lender fees (origination, processing, underwriting) — these are negotiable. Section C is title and settlement fees — some of these you can shop for. Section E is prepaid items (homeowner's insurance upfront, prepaid interest, initial escrow setup) — these aren't really fees, you'd pay them regardless. What are the big line items on yours?

From the RatesQ team

Normal range is 2–4% in most states, higher in some (NY and NJ have higher transfer taxes, for example). On your $400k loan: get 2-3 more Loan Estimates and specifically compare Section A (lender fees) and Section C (settlement fees). Title insurance in Section C is often shoppable — you can choose your own title company. Some sellers will also contribute to buyer closing costs as part of negotiations. Seller concessions of 2–3% are common in some markets. Ask your real estate agent if that's realistic in your area.

From the RatesQ team

Also remember the prepaids (escrow setup, prepaid interest, first year insurance) aren't going to the lender — they're just money that would have been due anyway. When comparing lenders, focus on Section A and C costs plus the interest rate together.