Whether you are buying a home or are refinancing, there are fees required to finalize the loan. We lump all these together and call them closing costs. With refinance loans, the closing costs are a bit less because certain elements are missing (such as title fees, home appraisal fees, and other sale-related fees).

This article will focus on the closing costs that you can expect to pay when you buy a property.

How much can you expect to pay in closing costs? 

Closing costs are about 2% to 5% of your loan amount. So if your loan is for $250k, you can expect to pay about $5,000 and $12,500 in closing costs. Admittedly, this is a fairly large range but we’ll break down the costs so you can have a better understanding of why it varies so much. 

Mortgage rates have been relatively consistent, but don't let that get you too comfortable. Rates are changing all the time --by how much, and whether it will be in your favor, we cannot say. We can make intelligent guesses, but we can't predict with any certainty.

However, that doesn't mean that you are entirely powerless when it comes to taking charge of the mortgage rate you qualify for. You hold a lot of power, including the ability to qualify for a lower rate by improving your credit score, buying points, and exploring the rates of various home loan options.

And here is another idea for getting a low mortgage rate in an uncertain market: get a floating mortgage rate.

Locked and Floating Mortgage Rate Compared

Mortgage Rate Lock