Seven Steps to Saving For a House This Year - Quicken Loans Zing Blog

As of June 25, 2018, we’ve made some changes to the way our mortgage approvals work. You can read more about our Power Buyer ProcessTM.

Mortgage closing costs are fees charged by the lender, to you, for services that must be performed in order to close your loan. You might be curious about how they’re determined and what’s included, so let’s go over what you can expect on a typical mortgage transaction when you buy or refinance a home.

Over the course of your loan approval process, lenders are federally mandated to give you the TILA-RESPA Integrated Disclosures (TRID), which are essentially two forms — the loan estimate and the closing disclosure. But let’s start from the beginning.

How Much are Closing Costs?

If you’re buying a home, your mortgage down payment isn’t the only check you’ll be writing on the day you close your loan. While paying closing costs is a standard step in the journey to homeownership, buyers might be surprised by the list of expenses. While the total fee amount can change throughout the loan process, you can expect to pay 2% – 5% of your home’s purchase price in closing costs, according to To avoid surprises, read our breakdown of common closing fees below and follow our tips to budget for a great closing day experience.

Closing costs can vary by mortgage option and amount, so the costs on a 30-year fixed or a 15-year fixed may not be the same as a 5-year adjustable rate (ARM) mortgage. And some loans, such as an FHA loan or a VA loan, actually allow a seller to cover all or some of the closing costs. But what exactly are the closing costs, regardless of whether you or the seller pays them?

The most common closing cost is the down payment. In addition to making your down payment, there are other costs and fees associated with your home purchase. Average closing costs generally range from $2,500 – $5,000, which is a sizable amount of money when you consider this is paid upfront at closing. But where exactly does it all go?

A common misconception about mortgage closing costs is that they all go to the lender, when in reality, many costs are related to services performed by others. Mortgage closing costs cover expenses associated with getting a home loan, from inspections and appraisals to title insurance, taxes and more. It’s important to check your lender fees and closing costs carefully. If a lender boasts incredibly low rates, it’s possible they will try to make up the difference with additional lender fees, so be sure to compare apples to apples. Check out this video for an understanding of the difference between mortgage rates and APR.

Many of your mortgage closing costs go to a third-party for services necessary to complete the transaction. Lenders typically have no control over these fees. Below you’ll find possible closing cost items involved in an average loan transaction:

  • Appraisal
    The appraisal is required to determine the fair market value of the home. A property appraisal is generally required by a lender before loan approval to ensure that the mortgage loan amount is not more than the value of the property. Therefore, an appraiser is needed to make this determination.
  • Credit Report
    When you apply for a mortgage, you have to prove that you are capable of paying it back. Lenders will obtain a copy of your credit report to review your borrowing history and ultimately determine if they should risk lending you money. This fee goes to the credit reporting agencies like Experian, TransUnion or Equifax. While a credit report will cost you around $15 – $30, some lenders receive a discounted rate with credit report agencies and will cover this cost themselves.
  • Closing Fee
    This fee is paid to the title company or attorney for conducting the closing.
  • Title Company Title Search or Exam Fee
    This fee is paid to the title company for doing a detailed search of the property records for your home. The title company will look at prior deeds, court records, property and name indexes, and many other documents. This is to ensure that there are no liens or problems associated with your ownership of the property.
  • Survey Fee
    A survey of the property may be required to verify boundary lines for your property and to ensure that there is no encroachment on the lot.
  • Flood Determination/Life of Loan Coverage
    This cost goes to determining whether your property is located in a federally designated flood zone. If the property is found to be located within a flood zone, you will need to buy flood insurance.
  • Courier Fee
    Not all lenders charge this fee, but if you do see this listed, it covers the cost of transporting documents to complete the loan transaction as quickly as possible to avoid paying additional interest on your mortgage loan.
  • Title Insurance (Lender’s Policy)
    This covers the costs of assuring the lender that you own the home and the lender’s mortgage is a valid lien.
  • Title Insurance (Owner’s Policy)
    This is an insurance policy protecting you in the event someone challenges your ownership of the home.
  • Homeowners Insurance
    Homeowners insurance is required to cover possible damages to your home. In the event of a fire or other damage, homeowners will receive this insurance to cover the costs of rebuilding. Your first year’s insurance is often paid at closing.
  • Buyer’s Attorney Fee (Not required in all states)
    This fee is paid to the attorney who prepares and reviews all of the closing documents on your behalf.
  • Lender’s Attorney Fee (Not required in all states)
    This fee is paid to the lender’s attorney for preparing and reviewing all of the closing documents on behalf of the lender.

Paying Your Closing Costs

Walk confidently into your closing day by carefully planning your budget and reviewing options to reduce your closing costs. You can get an estimate by using the SmartAsset closing costs calculator based on the amount of your mortgage.

Examine Each Fee

When you do receive your loan estimate, take the time to carefully review each fee with your lender, advises You may be able to negotiate some fees, requesting that the lender cover some costs. If you shop around, you can ask your lender to match the closing costs offered somewhere else.

Negotiate with the Seller

You can actually reduce the amount you pay at closing by requesting the seller to cover closing fees. One way is to offer the full purchase price on the home with the stipulation that the seller pays the costs associated with closing. Most sellers expect homebuyers to offer less than the listing price on their home. A seller will be much more open to negotiate when facing an offer of the full asking price. Another option is to meet the seller halfway, dividing the closing costs between both parties.

Skip the Points

Essentially pre-paid interest, one point is the equivalent of 1% of the total cost of the loan. Mortgage lenders offer discount points to lower the interest rate on the loan. But in a low-interest rate climate, you may opt to pay less at closing by passing on the points.

Waive the Appraisal

If you are refinancing, you may be able to cut the appraisal fee if your home has been appraised recently. If this is the case, ask your lender for an appraisal waiver. You can also save on your title insurance by asking for a cheaper rate when you refinance.

Roll Closing Costs into Your Mortgage

When refinancing, have you heard of the mythical no-closing cost mortgage? It’s real, but don’t be fooled. Not paying costs at closing may cost you more in the long run. Typically, you can skip paying fees at closing by rolling the costs into the price of your mortgage if you have enough equity or by paying a higher interest rate on your loan. recommends reducing the price you pay overall by paying your closing costs up front.

Questions? Contact a Home Loan Expert today or give us a call at (800) 785-4788.


Related Posts

This Post Has 40 Comments

  1. Hello its so unfortunate that the people behind the scenes selling me refinance never once mentioned this site to me so that i could tweek my loan estimate. Im need to keep faith that today things will be resolved with my final loan numbers a discrepancy olf 1092 bucks lost on tthe loan mumbers. Can someone call me ? Olga

    1. Hi Olga:

      This article isn’t meant for making tweaks to your loan estimate, but instead to give you a ballpark idea of what you might pay for at closing and what it might cost. Everyone’s loan is different. That said, I’m going to go ahead and have someone reach out. I’m also removing your phone number because this is a public website.

  2. I don’t understand why my closing cost is $18,000.00. Also why do the sellers have to pay the closing cost? Please explain. Thank You

    1. Hi Anna:

      While sellers may pay for certain closing costs, that’s something that’s negotiable between buyer and seller. As far as your personal closing cost, I see you working with us, so I’m going to have someone reach out to explain how things are currently structured and go over any options we may need to discuss before your loan closes.

    1. Hi Darby:

      I’m going to have someone reach out, but a variety of factors can impact your rate including your credit score, the amount of your down payment and the number of prepaid interest points you’ve paid among others. Here’s an article that breaks it down.

  3. My refinance estimate came back with 2.8% in points for origination charges and a total of $7,000 at closing. This is outrageous. I was told you can come down on points if the interest rate raises, but my interest rate is already high.

    1. Hi Chris:

      I see that you’re working with us, so I’m going to have someone go ahead and reach out to go over your situation and but for any potential opportunities. That being said, there are many factors that affect both your closing costs and your rate. The number of points you have is just one of those factors.

      Kevin Graham

  4. My loan number is In your “Here’s How Your Numbers Work”, Under items you own at closing.” You list under Loan Costs $5,557,72. This seems very high and may be inaccurate. I have already issued checks to the listing agency of $500. Another check to Quicken Loans for $500 for an appraisal fee. I have also issued a check to Integrity Home Inspections for $450.00. What other fees am I being charged by Quicken Loans to make the Loan Cost (D) $5,557.72. Does this figure include my FHA down payment of 3.75%? Or are there other hidden fees and what exactly are they? Also, what exactly are my prepaids & Escrows (F&G) They seem rather high. Finally why am I paying $521.00 for Other (H)? What Other fee am I paying? Am I being nickeled and dimed. Please be very specific in your explanations at $5,557.72 seems very high on a $77,600 home purchase. Is there any flexibility in these payments, as I am a repeat Quicken Loans mortgage customer?

    1. Hi James:

      It’s not our intention to hide fees from you. Every situation is different, and there are some details in here that are very specific to your personal situation. I’m going to get this to our client relations team so someone can reach out and give you a full explanation.


      1. I am having the same issue, i just received my loan estimate and i am being asked to pay $7151 at closing on a $72000 loan. Your website states 2-5% is the rate for closing fees. Why am i being asked to pay over 10%, this is insane.

        1. Hi Christopher:

          Every situation is different, and closing costs vary. I’m going to have someone reach out to give you a full explanation of any fees and go over your options. Thanks for reaching out!

    2. Wish some of these issues were explained online so we could all know. I’m sure it would be easier than calling everyone who reads this. 🙂

      1. Hi Kenneth:

        When it’s general information, we will explain here. The problem with the lending process is that everyone’s situation is different and to give a definitive answer, a lot of the time, the only good way is to get on the phone or in a chat with someone and talk it out. Different states also have different regulations, so we want them to talk to someone who is licensed to give them advice in their state. The trade-off is that we sometimes can’t say as much publicly. I totally understand where you’re coming from, but that’s why we answer some of these things the way we do. Have a good day!

  5. Hi,
    I have a question for you, if I have $40k to purchase a home with a 20% down, on a fix rate loan and would like to borrow more money for a 350, 000 home – only having 40K down, can this be done, without getting another type of loan that its not the 30 year fix conventional loan?

    Thank you,

    1. Hi Jesus:

      This can absolutely be done. You don’t have to put down 20% to get a 30-year fixed conventional loan. The only thing to be aware of is that you’ll pay for mortgage insurance until you reach 20% equity. You can avoid a monthly mortgage insurance charge by taking a lender-paid mortgage insurance option like PMI Advantage. You take a slightly higher rate to avoid the monthly charge with these types of programs. Otherwise, you can pay for the mortgage insurance on a monthly basis yourself, but you can get a conventional loan with as little as 1% down if you wanted, so the down payment you have is fine.

      If you would like to look into your options, you can get preapproved online through Rocket Mortgage. If you’d rather get started over the phone, one of our Home Loan Experts would be happy to talk to you at (888) 980-6716. Hope this helps!

    1. Hi Becky:

      I’m going to send you an email to make sure you’re not working with us. I don’t see a record in our system based on your email address. That being said, I can say in general that costs on loans can change. However, once you get an official loan estimate, there are strict limits on how much they can go up. That does seem like a steep increase, but if you switched loan programs or the appraisal came back low and all of a sudden you didn’t actually have enough equity to refinance, then your closing costs might change like that. We would be happy to look in your situation if you call (888) 980-6716. Hope this helps a little!


    2. I hope this is not typical because the same thing happened to me… what a coincidence… my quote went up 4K as well… I was quoted around 5K and now it shows 9K. I’m looking into it. Good luck.

      1. Hi David:

        I see that you’re working with us. I’m going to have someone reach out to go over your options and see if we can keep you on track.

        Kevin Graham

    1. Hi Lynn:

      I’m going to have someone reach out to you about this. Have a great day!

      Kevin Graham

    1. Hi John:

      We can definitely have someone reach out and help you look into your closing costs. They’ll be in touch.

      Kevin Graham

  6. Hi can anyone please tell me when and to whom closing costs would be paid in a quicken loans Fha loan? Are they paid the day of closing or or they sent ahead prior to closing?

    1. Hi Brooklyn:

      I’m going to have someone reach out to you regarding our closing process and the way it works. They’ll be in contact.

      Kevin Graham

    2. Do Purchase Money Mortgages from lending institutions allow for construction of a new home as well? My wife and I located a piece of property to buy. We plan to build a new home, and would like to consolidate the financing if possible. A co-worker told me that he purchased property upward of $125,000, followed by a purchase a modular home for $250,000, and his bank assigned a Partial Purchase Money Mortgage. He said the total sum of the mortgage borrowed was $375,000, $125,000 being purchase money, and the remainder being future advances. I am also told by others to consider a construction/ permanent loan, where the initial construction cost will cover the land purchase. I really need some guidance, thank you.

      1. Hi Robert:

        We don’t do loans for new construction, unfortunately. Your questions would be better directed at a lender that specializes in this type of transaction. I don’t have any specific recommendations, but I would imagine a Google search might bring up plenty of results for these lenders.

        Kevin Graham

          1. Hi Jason:

            Sorry we missed this one. That’s something you can certainly speak with one of our Home Loan Experts about. You can get in touch with them by filling out this form or calling (888) 980-6716.

            Kevin Graham

  7. Why is there such a huge gap of costs for every closing cost charge.
    I guess this gives quicken the advantage & option of charging whatever they choose, which would most likely be the higher charge for the majority of services!
    If so, time to move on to another Lender!

    1. Good afternoon, Bonnie. We’d like to get some more details about your situation, so I’m going to have one of our Client Relations Specialists reach to you to get some more information.

  8. Where are the lender fees, I guess you don’t want to disclose it upfront for fear of driving away business. I bet it is not very competitive.

  9. […] Ahead of A new Loan App …Refinancing Student LoanSmart Couples Compare Car Insurance QuotesClosing Costs and Fees Explained.broken_link, a.broken_link { text-decoration: line-through; […]

Leave a Reply to Zing Admin Cancel comment reply

Your email address will not be published. Required fields are marked *