What Is Closing Costs?
Closing costs are the fees and expenses you pay to finalize a home purchase, beyond the down payment. They include lender fees, appraisal, title insurance, escrow charges, recording fees, and prepaid items like property taxes and homeowners insurance.
Key Facts
- Closing costs typically range from 2% to 5% of the purchase price.
- In Monterey County, expect roughly $12,000 to $25,000 on a typical purchase.
- Some costs are negotiable — you can ask the seller to contribute toward your closing costs.
- Your lender must provide a Loan Estimate within 3 days of your application showing estimated costs.
- Closing costs are separate from your down payment.
Real-World Example
On a $650,000 home, your closing costs might include: lender origination ($3,250), appraisal ($600), title insurance ($2,800), escrow ($2,200), recording ($200), prepaids ($4,500) = about $13,550 total.
Why It Matters
Closing costs are often underestimated by first-time buyers. They're a real, significant expense on top of your down payment. Understanding them helps you budget accurately and negotiate better — seller credits, lender credits, or shopping for services can save thousands.
En Español
Los costos de cierre son las tarifas y gastos que pagas para finalizar una compra de casa, además del enganche. Incluyen comisiones del prestamista, tasación, seguro de título, cargos de fideicomiso, tarifas de registro y artículos prepagados como impuestos y seguro de hogar.