Pretty 2 story brick home

Closing costs are the fees and expenses required to complete a real estate transaction. These costs go beyond your down payment and monthly mortgage payments and can be negotiable between the buyer and seller.

Did you know? Some of these costs may be included in your loan, reducing your out-of-pocket expenses at closing. Your mortgage lender and real estate agent can help determine the best approach based on your situation.

Common Closing Costs Explained

Here’s a breakdown of the most common closing costs:

  • Application Fee – Some lenders charge a fee to process your mortgage application.
  • Origination Fee – This covers the cost of setting up and underwriting your loan.
  • Discount Points – Optional fees paid upfront to lower your mortgage interest rate (each point equals 1% of the loan amount).
  • Appraisal & Survey Fees – Costs for home valuation and property boundary verification.
  • Title Search & Title Insurance – Ensures there are no legal issues with the property title and protects you from future ownership disputes.
  • Property Taxes – Includes city, county, and state taxes required for the legal transfer of ownership.
  • Homeowners Insurance – Required by lenders to protect your home from damage or loss.

Depending on the loan type (such as FHA, VA, or Conventional), you may encounter additional fees. VA loans, for example, often have a VA funding fee, while FHA loans include mortgage insurance premiums.

How to Reduce Your Closing Costs

If closing costs feel overwhelming, there are ways to lower them:

Negotiate with the Seller – In some cases, sellers may agree to pay a portion of closing costs.
Use Lender Credits – Some lenders offer credits to offset upfront costs in exchange for a slightly higher interest rate.
Explore Down Payment Assistance (DPA) Programs – Many Indiana & Kentucky buyers qualify for grants or loans that help with closing costs.
Shop Around for Lenders – Comparing multiple mortgage lenders can help you find lower fees.

If you’re unsure about your options, let’s talk! I work with over 250 lenders, many of whom offer incentives and assistance programs to help reduce upfront costs.

Final Thoughts: Get Expert Guidance on Closing Costs

Closing costs are a key part of buying a home, and understanding them will help you budget effectively. As your mortgage advisor, I’ll guide you through your best options, whether it’s negotiating fees, exploring lender credits, or finding assistance programs.

Ready to discuss your home loan options? Schedule a free consultation today!

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