All the fees, taxes, and prepaid items due at closing.
Closing costs are the fees, taxes, and prepaid items that must be paid at closing to complete a real estate transaction. They cover lender charges, title and escrow services, government fees, prepaid items (taxes, insurance, interest), and recording costs. Closing costs typically run 2–5% of purchase price on residential and 1–3% on commercial.
Closing costs vary dramatically by state, transaction type, and loan program. In low-tax states like Texas and Florida, total closing costs on a $400k residential purchase might run 2.5–3.5%. In high-tax states like New York and Illinois, the same purchase might see 4–6% closing costs due to higher transfer taxes, mortgage recording fees, and title premiums. Always estimate closing costs early in the deal evaluation.
The biggest line items typically: origination fee (1–2 points of loan), title insurance premiums (0.5–1.0% of price), transfer taxes (highly variable — 0% in some states, 2–4% in NY/Chicago), recording fees ($75–$1,500 depending on state), prepaid property taxes (proration through closing date), and prepaid interest (interest from closing date to first payment date).
On refinances, closing costs are usually 1.5–3% of loan amount — slightly lower than purchase because there's no transfer tax and the title insurance is just a lender's policy. Cash-out refis often have slightly higher costs due to larger loan amounts. The borrower can typically roll closing costs into the loan rather than paying out of pocket.
On commercial transactions, closing costs are more variable and often include legal fees ($5k–$25k+), environmental reports ($2k–$8k), property condition assessments ($3k–$10k), survey ($2k–$15k), and broader title work. Commercial closings frequently have $25k–$100k+ in third-party costs depending on deal size and complexity.
| Purchase price | $450,000 |
| Loan amount (80% LTV) | $360,000 |
| Lender fees | |
| Origination (1 point) | $3,600 |
| Processing / underwriting | $1,200 |
| Appraisal | $550 |
| Credit report | $75 |
| Title / escrow | |
| Owner's title insurance | $2,200 |
| Lender's title insurance | $1,450 |
| Escrow / settlement | $650 |
| Government fees | |
| Recording | $185 |
| Transfer tax (state) | $1,575 |
| Prepaid items | |
| Property tax escrow seed (3 mo) | $1,650 |
| Hazard insurance (1 yr prepaid) | $1,350 |
| Prepaid interest (15 days) | $1,050 |
| Total closing costs | $15,535 |
Fees, taxes, and prepaid items due at real estate closing — lender charges, title and escrow services, government fees, prepaid taxes and insurance.
Residential purchase: 2.5–5% of price. Residential refinance: 1.5–3% of loan. Commercial: highly variable, 1–4% of loan plus third-party costs of $25k–$100k+ on institutional deals.
Some — origination fees, lender fees, and broker commissions are often negotiable. Title insurance is mostly regulated and harder to negotiate. Government fees (transfer taxes, recording) are fixed.
On most refinances yes — the loan amount can be increased to cover closing costs, reducing cash-to-close. On purchases, the seller can sometimes "credit" closing costs from the sale proceeds, effectively rolling them into the price.
Combination of state mortgage recording tax (~1.8–1.925% of loan), state transfer tax (0.4–2.625% of price), city transfer tax (in NYC), and high title insurance premiums. Closing on a $1M+ purchase in Manhattan can easily exceed 5%.
Matrix provides honest closing cost estimates upfront and works with closing teams to keep costs in line with the quote.
