How To Negotiate Your Mortgage Closing Costs Bankrate Caret RightMain Menu Mortgage Mortgages Financing a home purchase Refinancing your existing loan Finding the right lender Additional Resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Bank Banking Compare Accounts Use calculators Get advice Bank reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Credit Card Credit cards Compare by category Compare by credit needed Compare by issuer Get advice Looking for the perfect credit card? Narrow your search with CardMatch Caret RightMain Menu Loan Loans Personal Loans Student Loans Auto Loans Loan calculators Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Invest Investing Best of Brokerages and robo-advisors Learn the basics Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Home Equity Home equity Get the best rates Lender reviews Use calculators Knowledge base Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Loan Home Improvement Real estate Selling a home Buying a home Finding the right agent Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Insurance Insurance Car insurance Homeowners insurance Other insurance Company reviews Elevate your Bankrate experience Get insider access to our best financial tools and content Caret RightMain Menu Retirement Retirement Retirement plans & accounts Learn the basics Retirement calculators Additional resources Elevate your Bankrate experience Get insider access to our best financial tools and content Guide to Closing Costs Advertiser Disclosure
Advertiser Disclosure
We are an independent, advertising-supported comparison service. Our goal is to help you make smarter financial decisions by providing you with interactive tools and financial calculators, publishing original and objective content, by enabling you to conduct research and compare information for free - so that you can make financial decisions with confidence.
Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. How We Make Money
The offers that appear on this site are from companies that compensate us. This compensation may impact how and where products appear on this site, including, for example, the order in which they may appear within the listing categories. But this compensation does not influence the information we publish, or the reviews that you see on this site. We do not include the universe of companies or financial offers that may be available to you. SHARE: Noel Hendrickson/Getty Images July 20, 2022 Checkmark Bankrate logo How is this page expert verified? At Bankrate, we take the accuracy of our content seriously. "Expert verified" means that our Financial Review Board thoroughly evaluated the article for accuracy and clarity. The Review Board comprises a panel of financial experts whose objective is to ensure that our content is always objective and balanced. Their reviews hold us accountable for publishing high-quality and trustworthy content. Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Casey Fleming is an expert who helps clients understand how the mortgage industry and loan products work, and how to get the best mortgage for their specific needs. Bankrate logo The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict editorial integrity, this post may contain references to products from our partners. Here's an explanation for how we make money. Bankrate logo The Bankrate promise
Founded in 1976, Bankrate has a long track record of helping people make smart financial choices. We’ve maintained this reputation for over four decades by demystifying the financial decision-making process and giving people confidence in which actions to take next. Bankrate follows a strict , so you can trust that we’re putting your interests first. All of our content is authored by and edited by , who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner. Bankrate logo Editorial integrity
Bankrate follows a strict , so you can trust that we’re putting your interests first. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. Key Principles
We value your trust. Our mission is to provide readers with accurate and unbiased information, and we have editorial standards in place to ensure that happens. Our editors and reporters thoroughly fact-check editorial content to ensure the information you’re reading is accurate. We maintain a firewall between our advertisers and our editorial team. Our editorial team does not receive direct compensation from our advertisers. Editorial Independence
Bankrate’s editorial team writes on behalf of YOU – the reader. Our goal is to give you the best advice to help you make smart personal finance decisions. We follow strict guidelines to ensure that our editorial content is not influenced by advertisers. Our editorial team receives no direct compensation from advertisers, and our content is thoroughly fact-checked to ensure accuracy. So, whether you’re reading an article or a review, you can trust that you’re getting credible and dependable information. Bankrate logo How we make money
You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. You’ve found your dream home, settled on a price with the seller and secured a tentative commitment from the lender on a mortgage. Yet, as you approach the , you’re concerned about mounting expenses and those pesky , and looking for ways to make some of these costs go away — or, at least, to reduce the damage. The answer is to negotiate. How much are closing costs
Closing costs vary depending on a number of factors. The most important are: The price of your home If you’re buying or refinancing Closing costs are charged by the lender and other vendors, and they can add up quickly. As a general rule, you can expect closing costs to cost you about 2 percent to 4 percent of the total home price. In 2021, the national closing costs average on a single-family property purchase was $6,905, including taxes, according to . For refinancing the same type of property, the national average was $2,375. 7 strategies to reduce closing costs
1 Break down your loan estimate form
The lender is required to give you the form within three days of completing a mortgage application, but there’s nothing keeping them from giving it to you sooner, so ask for it. This form includes an itemized list of costs, including your loan amount, interest rate and monthly payments. On page two it has a section called “Services you can shop for,” including: Pest inspection Survey Fees for the title search and the settlement agent, and for the insurance binder The vendors listed on the form could be your lender’s preferred vendors, but you’re not required to work with them, and your lender is also required to offer alternatives. You can shop around for lower-priced vendors for different services on your own; however, if your independently-selected vendor changes its pricing before closing, you’ll be on the hook for any increase. If you choose a lender-provided vendor instead, its pricing isn’t allowed to change by more than 10 percent from the original quote. Additionally, if you’re buying a home, note that the seller or seller’s real estate agent might be the ones who chose the title and escrow provider. If you want to get new vendors in this case, you’ll need to negotiate the purchase agreement with the seller, not with your mortgage lender. 2 Don t overlook lender fees
Many lenders charge loan costs, including those for and underwriting. You might not be able to get out of them, but you can try to get your lender to knock them down. It’s better to ask for a discount and get denied than to not ask at all. It’s also a good idea to from other lenders. If you can get an estimate before you submit your application, try to get different loan estimate forms from different lenders to compare. For an accurate basis of comparison, get these estimates on the same day and at the same time, since pricing changes so frequently. 3 Understand what the seller pays for
Who pays what closing costs? While the buyer pays some of the closing costs, the , such as the real estate agent commission. You can ask your seller to chip in for your portion, which would be reflected as “seller credits” on the loan estimate form. Keep in mind that this strategy might not work in a seller’s market, when sellers have much more leverage. 4 Think about a no-closing-cost option
If you don’t have the cash available to pay closing costs, you could consider a , if your lender offers it, usually in exchange for a higher interest rate. This saves you from having to have the money upfront at the closing, but ultimately costs you more in the long run because your lender is effectively absorbing these costs while you pay a higher rate. 5 Look for grants and other help
Different cities, counties and states have down payment and for qualified homebuyers, especially first-time homebuyers. Explore your options with this guide to . 6 Try to close at the end of the month
When you you reduce your cash outlay at closing by reducing the number of days to which the is applied before your — usually on the first of each month. To see how much you’d save, just multiply your loan amount (the total amount financed) by your interest rate — for instance, if your rate is 3 percent, multiply by .03 — to get your annual interest expense. Then, divide that figure by 360 to get your daily interest charge (lenders calculate interest using 360 days, not 365. Next, multiply that figure by the number of days left in the month plus the first day of the following month. If your loan is funded toward the end of the month, this figure would be much lower than closing mid-month. 7 Ask about discounts and rebates
Did you ever go to buy a car and find out about rebates you didn’t know existed? The same may be true with mortgage loans, as some lenders offer incentives to attract borrowers. These rebates can knock down various costs a few hundred dollars — easy money for the time it takes you to ask. You never know what you may find. Bottom line
If you’re prepared for mortgage closing costs well before they hit, you won’t be surprised by the final figure. Don’t settle for what your lender quotes you, and don’t hesitate to shop around to compare costs from other lenders early on in the process. You can also try to negotiate some of these costs, potentially get the seller to help with others and look into state or local programs for more closing cost assistance. SHARE: Dori Zinn has been a personal finance journalist for more than a decade. Aside from her work for Bankrate, her bylines have appeared on CNET, Yahoo Finance, MSN Money, Wirecutter, Quartz, Inc. and more. She loves helping people learn about money, specializing in topics like investing, real estate, borrowing money and financial literacy. Suzanne De Vita is the mortgage editor for Bankrate, focusing on mortgage and real estate topics for homebuyers, homeowners, investors and renters. Casey Fleming is an expert who helps clients understand how the mortgage industry and loan products work, and how to get the best mortgage for their specific needs.