What’s Included in Closing Costs?

When you’re getting close to buying your dream home, you’ll hear the term “closing costs” come up frequently. But what exactly are closing costs, and how much should you expect to pay?

At Rapid Home Loan, we believe in transparency. We want you to know what you’re paying for, why it matters, and how to plan for it—so there are no surprises on closing day.

💡 What Are Closing Costs?

Closing costs are the fees and expenses associated with finalizing your mortgage and transferring ownership of a property. These are paid at the “closing” of your real estate transaction—typically on the day you sign the final paperwork and receive the keys.

They usually range from 2% to 5% of your home’s purchase price, depending on the location, loan type, and other factors.

📋 What’s Typically Included in Closing Costs?

Here’s a breakdown of what might be included in your closing costs:

1. Loan Origination Fee

This is what the lender (like Rapid Home Loan) charges for processing your mortgage application. It may include underwriting and administrative fees.

💲 Typical cost: 0.5% to 1% of the loan amount

2. Appraisal Fee

An independent appraisal determines the market value of the home to make sure you’re not borrowing more than it’s worth.

💲 Average cost: $300–$600

3. Credit Report Fee

Your lender will pull your credit history to assess your financial reliability.

💲 Typical cost: $25–$50

4. Title Search & Title Insurance

A title company will research the property’s history to ensure there are no ownership disputes or unpaid liens. Title insurance protects you (and the lender) against future claims.

💲 Combined cost: $500–$1,500

5. Attorney Fees or Settlement Fees

In some states, real estate attorneys are required. Even when optional, hiring one can help with reviewing contracts.

💲 Varies by state: $500–$1,500

6. Recording Fees

Your local government charges a fee to record the new deed and mortgage in public records.

💲 Cost depends on your county: $50–$250

7. Prepaid Costs (Escrow Funds)

These include things like:

Property taxes
Homeowners insurance
Prepaid interest (if your closing is mid-month)

These are placed in an escrow account and used to cover future payments.

💲 Can range from $1,000–$3,000+

8. Private Mortgage Insurance (PMI)

If your down payment is less than 20%, you may need to prepay a portion of PMI.

💲 Depends on loan and down payment

9. Home Inspection (Optional but Recommended)

While not always included in official closing costs, a home inspection is a separate out-of-pocket cost during the process.

💲 Typically: $300–$500

🏠 How Rapid Home Loan Helps You Prepare

At Rapid Home Loan, we don’t just give you a number—we walk you through every line of your Loan Estimate (LE) and Closing Disclosure (CD) so you understand what you’re paying and why.

We help:
✅ Estimate total closing costs
✅ Identify opportunities to lower them
✅ Negotiate credits with sellers when possible
✅ Recommend trustworthy local service providers

🧾 Can You Roll Closing Costs Into Your Loan?

In some cases, yes—you can roll certain closing costs into the loan amount or ask the seller to cover them. These options depend on your loan type and your budget.

Our team at Rapid Home Loan can help you explore whether this makes sense for you or if paying upfront is the smarter option.