What's actually in the bucket
The CFPB-mandated Closing Disclosure (CD), delivered at least three business days before settlement under the TRID rule, lists every line item. The categories that matter:
A. Lender fees (origination)
- Origination charge / underwriting fee — $500–$1,500. The lender's profit on processing your loan.
- Discount points — 0–2% of loan amount per point, optional. One point typically buys ~0.25% off the rate.
- Application / credit report / flood cert / tax service — $50–$200 each, mostly pass-through.
B. Services you can shop for
These appear in Section C of the Loan Estimate, and you can legally use a different vendor than the one the lender suggests:
- Title insurance (lender's policy) — ~0.5% of loan amount. Required by every US lender. Owner's policy is separate and optional but usually a good idea.
- Settlement / closing / escrow agent fee — $400–$1,200, depending on state and whether you use a title company or attorney.
- Survey — $300–$800, required in some states (TX, FL, GA), not in others.
- Pest inspection — $75–$200, often required for VA loans.
C. Services you cannot shop for
- Appraisal — $400–$700 single-family, $600–$1,200 luxury or rural. Ordered by the lender from an Appraisal Management Company (AMC) under Fannie Mae Selling Guide rules.
- Credit supplement / verification of employment — $50–$150.
D. Government / recording
- Recording fees — $50–$300, paid to the county.
- Transfer taxes — wildly variable. California: 0.11% (basic state). New York City: ~1.825% including mansion tax. Pennsylvania: 2% (1% state + 1% local typical). Delaware: 4% combined. Texas, Wyoming, Idaho: $0 — no state transfer tax.
E. Prepaids and escrow reserves
This is the bucket that surprises first-time buyers:
- First-year homeowners insurance — paid up-front at closing.
- Mortgage insurance (PMI / MIP) — first month if applicable.
- Property tax escrow — typically 2–6 months of property tax, deposited into the lender's impound account on day one.
- Prepaid interest — interest from closing date to month-end.
The 2–5% range, by state and loan size
Per ClosingCorp 2025 data and publicly reported settlement statements:
| State | Avg buyer closing costs (% of price) | Driver |
|---|---|---|
| Missouri | ~1.8% | No transfer tax, low title rates |
| Indiana | ~1.9% | Low recording fees |
| California | ~2.1% | No state transfer tax (county only) |
| Texas | ~2.5% | No transfer tax, but title insurance is filed-rate |
| Florida | ~2.7% | Doc stamps + intangible tax |
| Pennsylvania | ~5.0% | 1% state + ~1% local realty transfer tax |
| New York | ~5.3% | Mortgage recording tax + mansion tax above $1M |
| Delaware | ~5.5% | 4% combined transfer tax |
These are buyer-side only and exclude the down payment.
What's negotiable, what isn't
The flippable line items are the lender fees in Section A and the title/escrow services in Section C. Recording fees, transfer taxes, and the appraisal are statutory or rate-filed; haggling rarely moves them.
Three concrete moves that work in 2026:
- Get three Loan Estimates and play them. Federal law requires the lender to issue an LE within three business days of a complete application. Use the highest-cost LE as leverage with the lowest-cost lender. Origination charges move $500–$2,000 per round.
- Shop title insurance. In states with non-rate-filed title (most of the US except TX, NM, and a few others), independent title companies often quote 20–40% below the lender's preferred vendor.
- Ask for seller credits, especially after the 2024 NAR settlement. In a softer market, a 1–3% seller credit applied to closing costs is normal — the seller nets the same as if they cut the price, but the buyer keeps cash on hand. See our first-time homebuyer offer strategy guide for the contract language.
When the numbers move after the LE
Under the CFPB's TRID rule, most fees on the Loan Estimate cannot increase at closing without a valid Changed Circumstance. The "0% tolerance" bucket (lender's own fees, transfer taxes the lender disclosed) cannot rise at all. The "10% aggregate" tolerance bucket (recording fees, third-party services from the lender's list) can collectively rise 10%. Anything outside those rules is a refundable overcharge — file with the lender in writing within 60 days of closing.
Common pitfalls
- Confusing closing costs with the down payment. They are separate. A 5% down loan on a $400k home isn't $20k total — it's $20k down plus $8–$20k closing.
- Trusting the seller's GFE-era estimate. The Good Faith Estimate was retired in 2015 and replaced by the Loan Estimate. Anything labeled "GFE" today is non-compliant.
- Skipping the three-business-day CD review. That window exists specifically so you can spot fee inflation before wiring money. Use it.