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The Average Mortgage Closing Costs for Buyers in the U.S. By State

How Much is the Average Cost of a Home Loan Close Out?

Buying a home is one of the most significant investments you’ll ever make. But before you can move in, there are closing costs to consider – and they add up quickly! Closing costs typically range from 3-6% of your loan amount, so it pays to understand what these fees cover and how much they will cost.

In this article we’ll discuss average mortgage closing costs across different states as well as strategies for reducing them when possible. We’ll also provide an overview on who’s responsible for paying which expenses during the process, plus tips on preparing yourself financially ahead of time so that no surprises arise at signing day!

What are Closing Costs?

Closing costs are fees that must be paid in order to finalize the purchase of a home. These costs typically include appraisal fees, loan origination charges, title and deed transfer fees, taxes, and other miscellaneous expenses. Closing costs can vary significantly depending on location and type of property you purchase.

As such, it is important for buyers to research closing costs before entering into any real estate transaction so they can better understand what to expect financially when purchasing a home.

How Much is the Average Cost of a Home Loan Close Out?

The average mortgage closing cost for buyers in the U.S. varies greatly by state. According to Bankrate’s 2022 Closing Cost Study, closing costs in states like New York and Texas are higher than other states, with an average of $5,650 and $4,814 respectively.

On the other end of the spectrum are states like Indiana and Iowa which have lower average closing costs of $3,072 and $2,978 respectively.

Generally, states that have higher median home prices and larger population centers tend to have higher closing costs. For example, California has an average closing cost of $3,813 which is a middle ground between NY and IA. It is important to compare closing costs in different states as they can vary significantly.

Additionally, it may be beneficial to speak with a qualified real estate lawyer or financial advisor prior to signing any contracts or agreements when purchasing a home so all potential fees are taken into account and understood prior to making any commitments.

It is important to note that these averages can vary depending on several factors including property type, size of loan amount being requested, down payment percentage and more. As such, it is wise for buyers to factor in a cushion when estimating their closing costs so they aren’t taken by surprise by any hidden fees or charges during the home buying process.

Understanding Your Total Mortgages Fees

In addition to closing costs, buyers should also consider other fees associated with mortgages when budgeting for a home purchase. These fees can include the loan origination fee, appraisal and inspection fees, private mortgage insurance (PMI) premiums, and more.

To ensure you are getting the best deal possible on your mortgage it is important to shop around and compare different lenders to find the one that offers the lowest interest rate as well as any additional incentives they may offer.

Additionally, buyers should read over all documents related to their mortgage thoroughly before signing so they understand what is included in their loan amount and all potential fees associated with it.

Tips for Reducing Closing Costs

Reducing closing costs can be beneficial for buyers who are looking to save money when purchasing a home. Here are a few tips that may help to reduce your closing costs: 

  • Negotiate with the seller of the property. Many sellers will pay for some or all of the buyer’s closing costs if it helps them to get the deal done. 
  • Shop around for lenders and compare quotes from different banks and mortgage lenders in order to find one that offers the lowest rates and closes out fees. 
  • Ask your lender about any discounts they may offer, such as waiving appraisal fees or reducing origination charges. Many lenders will be willing to negotiate in order to gain your business.  
  • Make a larger down payment on the property. The more money you put down upfront, the less you will need to take out in a loan and this can reduce your total closing costs. 
  • Talk to your real estate agent or lawyer about any potential options that may be available for reducing your closing costs. They may be able to provide valuable insight or advice about what steps to take in order to keep your expenses low. 

By following these tips, buyers can potentially save hundreds of dollars when purchasing a home which can help to make their dream of homeownership become a reality. Additionally, it is important for buyers to educate themselves on all aspects of real estate transactions prior to entering into one so they understand what fees and costs they can expect and how to manage them. 

Get the Inside Scoop on How to Pay Ancillary Expenses During Your Processes

When purchasing a home there are certain ancillary expenses that may need to be paid, such as title insurance and prorated property taxes. These costs can vary depending on the state of purchase and it is important to factor them in accordingly when budgeting for your home.

Additionally, some states require additional paperwork or documents to be filed with the local government before closing which can also add extra fees. Buyers should talk to their real estate professional and research their state laws prior to closing so they understand what extra costs might apply and how much money will need to be set aside for these items.

It is also important for buyers to consider any other potential ancillary expenses related to homeownership such as utility bills, homeowner’s insurance, and association fees. It can be helpful to research these items beforehand so they know what they need to budget for once they are moved into their new home.


When it comes to buying a home, understanding all of the associated closing costs and ways to potentially reduce them can help buyers save money on their purchase. It is important for buyers to do their due diligence in order to ensure they understand what fees will be associated with their loan as well as any potential ancillary expenses that may need to be paid.

By doing research beforehand, buyers should have no problem finding a mortgage loan that works within their budget and making their dream of homeownership a reality.


Q: Who pays for which expense on settlement day?

A: On settlement day, the buyer is typically responsible for paying their closing costs as well as any associated taxes or fees. The seller will usually be responsible for paying the sales commission and any other fees associated with the sale of the home. 

Q: Where do I find assistance to cover my own personal share responsibilities involved in purchasing property? 

A: Your real estate professional or a local lender can help you to evaluate different financing options and determine if there are any available assistance programs that may help to cover any of your own personal share responsibilities associated with purchasing property. 

Q: What should expect from the lender regarding the final bill due date arrival?

A: The lender will typically provide you with a closing statement outlining the total amount that is due at closing as well as the process for making payment. Most lenders accept a variety of payment methods such as cash, check or wire transfer and will provide instructions on how to complete these transactions. 

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