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Home Closing Costs
Definition
Fees paid at the completion of a real estate transaction, typically 2-5% of the purchase price.
Explanation
Closing costs include: loan origination, appraisal ($300-500), title insurance ($500-1,500), attorney fees, inspection ($300-500), underwriting, recording, prepaid taxes, and insurance. They're paid at closing via cashier's check or wire.
Costs can sometimes be negotiated (seller concessions) or rolled into the loan (increasing the loan amount).
Example
$400,000 home, 3% closing costs = $12,000. Includes $500 appraisal, $900 underwriting, $1,200 title insurance, $2,000 property taxes.