Nobody mentions this untilyou’re at the table.
Closing costs are 2–5% of the purchase price. On a $300K home, that’s $6,000 to $15,000 in addition to your down payment. Buyers who don’t know this get surprised at closing. We’re telling you now.
The day you close, two thingsare due.
Your down payment and your closing costs. Both are due at the same time. Most people budget for one and get surprised by the other.
3% to 20% of purchase price. Varies by loan type and down payment strategy.
2–5% of purchase price. Due at closing in addition to the down payment.
Combined total. This is the number to plan around — not just the down payment.
The good news: DPA programs can cover closing costs, not just down payments. Some buyers get to the table with both covered.
$300K home. Every line item.
This is an approximation — exact amounts vary by lender, location, and loan type. But this is what a real closing looks like. No surprises.
Prepaids. They’re differentfrom closing costs.
Closing costs pay for services. Prepaids are future expenses collected upfront — money going into escrow for taxes and insurance, plus interest for the partial month you close in. Both appear on your Closing Disclosure.
Homeowners insurance
Full first-year premium collected at closing. Then 1-2 months added to escrow as a buffer. Expect $1,000–2,500 depending on your home and location.
Property tax escrow
Months of estimated property taxes deposited into your escrow account upfront. The exact amount depends on when in the year you close and your local tax rate.
Prepaid interest
Interest for the days between closing and your first full mortgage month. Close on the 1st and you owe almost a full month. Close on the 28th and you owe a few days.
Five ways to pay lessat closing.
Shop lender fees
Origination fees, underwriting fees, and processing fees vary by lender. Request Loan Estimates from multiple lenders and compare Section A — those numbers move.
Ask about seller concessions
In slower markets, sellers sometimes cover buyer closing costs. FHA allows up to 6%, Conventional allows 3–9% depending on down payment, VA allows 4%.
Use lender credits
Accept a slightly higher interest rate and the lender credits you cash at closing. The trade-off: you pay more over time. Good if cash at closing is tight now.
Stack DPA programs
Many down payment assistance programs also cover closing costs — not just down payments. In Pittsburgh, Keystone Advantage covers closing costs up to $10,000.
Close at end of month
Closing near the end of the month reduces prepaid interest — you owe interest for fewer days before your first payment. Minor savings but real.
Page 3 of your Closing Disclosure is where the truth lives.
The Closing Disclosure is a CFPB-mandated 3-page document delivered 3 business days before closing. You have 72 hours to review it. Use them. Page 3 shows your APR (the real cost of the loan) and your 5-year total cost. That’s what you compare when shopping lenders — not just the rate.
Your rate, loan amount, whether the rate is fixed or adjustable, and the projected monthly payment breakdown (P&I + estimated taxes/insurance/PMI).
Every fee, organized by category — what you owe to the lender, to third parties, and what’s prepaid. This is where you verify against your Loan Estimate.
The real cost of your loan. APR includes fees the rate doesn’t. The 5-year cost shows what you’ll spend through year 5. Compare this number across lenders — not just the rate.
Wire fraud isn’t a “what if.” It’s a “what happens every day.”
Criminals hack real estate email chains, send fake wire instructions, and steal down payments. Tens of thousands of buyers lose their money this way every year. The fix is simple: before wiring any money, call your title company or lender directly — from a number you already have, not from an email. Verify the wire instructions verbally. Every time.
You've seen the full closing cost picture — and five ways to reduce it.
Next up: Income. Credit. Assets.
Keep the momentum. Step 2 · Three Pillars picks up exactly where this page leaves off — still free, still no credit pull, still no sales call.