What are closing costs and how much should I expect to pay?

Closing costs are fees paid at the end of a real estate transaction to finalize the loan. They typically range from 2% to 5% of the loan amount and include lender fees (origination, underwriting), third-party fees (appraisal, title insurance, attorney), prepaid items (homeowner's insurance, property tax reserves), and government recording fees. On a $300,000 loan, expect $6,000 to $15,000 in closing costs. Lenders are required to provide a Loan Estimate within 3 business days of application. Some programs allow closing cost assistance or seller concessions to help offset these costs.