Most mortgage closing costs are not unique to one loan type. An appraisal, title work, recording fees, prepaid taxes and homeowners insurance can show up whether you use a conventional, FHA, VA, USDA or jumbo loan.
The differences show up in how those costs are handled. Some loan programs let you finance specific fees. Some limit what the borrower can be charged. Seller contribution rules also vary, which can change how much cash you actually need at closing.
The CFPB estimates that purchase closing costs typically run about 2% to 5% of the home's purchase price, excluding the down payment. That is a useful planning range, not a rule. Your cash to close depends on the actual loan, property and credits in the transaction.
Closing Costs By Loan Type Basics
| Loan type |
Typical closing-cost range |
Can closing costs be financed? |
Seller contribution rules |
Program-specific costs |
| Conventional |
No agency-set percentage. Purchase closing costs often fall within the CFPB's general 2% to 5% planning range. |
Generally not added to the purchase loan amount. Seller contributions, lender credits and eligible funds can reduce cash due. Refinance costs may sometimes be rolled into the new loan if the transaction meets LTV and underwriting requirements. |
For Fannie Mae loans, maximum financing concessions are generally 3%, 6% or 9% for primary residences and second homes depending on LTV. Investment properties are generally limited to 2%. |
No government program fee. PMI may apply depending on LTV and the loan structure. |
| FHA |
No FHA-set closing-cost percentage. Many transactions fall within the general 2% to 5% purchase range before considering the upfront mortgage insurance premium. |
The upfront mortgage insurance premium can be financed. Standard purchase closing costs generally are not simply added to the base mortgage. |
Interested parties may generally contribute up to 6% of the sales price toward eligible closing costs, prepaids and discount points. |
Upfront mortgage insurance premium plus annual mortgage insurance. |
| VA |
No VA-set closing-cost percentage. Costs vary by property, location, lender and funding-fee status. |
On a purchase loan, only the VA funding fee can generally be financed into the loan amount. Other closing costs must be paid at closing or covered by permitted credits. |
VA does not cap ordinary seller-paid closing costs, but seller concessions are generally limited to 4% of the home's reasonable value. |
VA funding fee unless the borrower qualifies for an exemption. VA also limits certain fees charged to the borrower. |
| USDA |
No USDA-set percentage. Costs vary by the transaction and can include a USDA guarantee fee. |
Yes. Eligible reasonable and customary closing costs can be included in the base loan when the appraised value supports the higher amount. The upfront guarantee fee can also be financed. |
Seller and other interested-party contributions are generally limited to 6% of the sales price. |
Upfront guarantee fee plus annual fee. |
| Jumbo |
Lender- and investor-specific. Dollar costs can be higher because the loan and property values are larger. |
Depends on the transaction and investor. Purchase costs usually need to be paid or offset rather than simply added above the permitted LTV. |
Investor-set. |
Investor-specific. Some properties or loan amounts can require additional appraisal or review costs. |
| HELOC / home equity loan |
Varies widely. Some lenders charge closing costs, while others waive or absorb some fees. |
Product-specific. Some costs may be deducted from proceeds or covered by the lender. |
Not a purchase transaction, so purchase seller-contribution caps do not apply. |
Appraisal or valuation, title and recording costs may apply. Some products have early-closure or reimbursement provisions. |
What's Included In Mortgage Closing Costs?
Closing costs are the expenses tied to getting the mortgage and transferring ownership of the property. They are separate from your down payment, although both are included when your lender calculates how much money you need to bring to closing.
The easiest place to see the breakdown is your Loan Estimate. The CFPB explains that lenders generally provide this three-page form within three business days after receiving a mortgage application. It includes estimated loan terms, monthly payments and closing costs.
Loan costs commonly include lender charges and third-party services required to make the loan. Depending on the transaction, you may see an origination charge, discount points, appraisal fee, credit report fee, flood determination, tax service, title search, lender's title insurance and other settlement services.
Other costs are not necessarily lender fees at all. Recording charges and transfer taxes may be imposed by state or local governments. Prepaid interest covers the period between closing and the start of your regular payment schedule. Homeowners insurance premiums and property taxes may also be collected upfront.
If your loan has an escrow account, your lender may collect money at closing to establish the initial balance. That is why two buyers using the same loan program can have very different cash-to-close totals. Property taxes, insurance costs and the time of year can all change the amount.
Discount points are another optional cost. You pay points upfront in exchange for a lower interest rate. Whether that makes sense depends on the price of the points, how much the rate falls and how long you expect to keep the mortgage.
Before closing, you will receive a Closing Disclosure showing the final numbers. The lender generally must provide it at least three business days before closing. Compare it with your Loan Estimate and look at both the total closing costs and the final cash-to-close figure.
If you want to estimate the numbers before you have a property under contract, a closing cost estimator can give you a starting point. Once you have a Loan Estimate, the actual disclosures are more useful than any generic percentage.
VA Closing Cost Rules Are Different
VA loan closing costs deserve their own explanation because VA regulates which fees a veteran borrower can pay and how some of those charges are structured.
The VA funding fee is the most obvious program-specific cost. Most VA borrowers pay the one-time fee unless they qualify for an exemption. On a purchase loan, the funding fee can be financed into the mortgage. VA's current guidance says other purchase closing costs cannot be financed into the loan amount.
VA also allows borrowers to pay reasonable and customary itemized charges such as the appraisal, credit report, title-related costs, recording fees and certain taxes. The lender can charge an origination fee of up to 1% of the loan amount. The interaction between that 1% fee and other lender-related charges is one of the more unusual parts of VA fee rules.
Historically, VA also prohibited veteran borrowers from paying real estate brokerage commissions. That rule now has an important exception. VA's temporary local variance allows veterans to pay reasonable and customary buyer-broker charges in qualifying situations. The policy was still active in 2026, so an older article that says a VA borrower can never pay a buyer-agent fee is no longer complete.
There is another important distinction around seller contributions. VA limits seller concessions to 4% of the property's reasonable value, but that does not mean a seller can pay only 4% toward everything.
Normal buyer closing costs are treated separately. VA explains that sellers or builders can provide credits toward some or all ordinary closing costs without those amounts automatically counting toward the 4% seller-concession cap. The 4% limit applies to concessions such as paying the VA funding fee, paying certain debts or judgments for the borrower, prepaid insurance and temporary buydowns.
That distinction can make a VA offer more flexible than it first appears. A seller may be able to cover ordinary closing costs and still provide concessions within the separate 4% limit, as long as the transaction follows VA rules and the credits do not exceed eligible costs.
USDA Loans Can Finance Eligible Closing Costs
USDA is unusual because eligible closing costs can sometimes be built into the mortgage instead of being paid entirely in cash.
Under USDA guidance, reasonable and customary costs associated with buying the property can be eligible loan purposes. That can include title costs, appraisal and other loan-acquisition expenses, reasonable lender fees and closing costs.
The appraisal sets an important limit. Say you agree to buy a home for $280,000 and it appraises for $285,000. USDA can potentially allow eligible closing costs to be financed into the base loan up to the supported appraised value, subject to the rest of the program's requirements. You cannot simply increase the loan without enough value to support it.
The upfront USDA guarantee fee is treated separately. USDA allows all or part of the upfront guarantee fee to be financed, and the total loan amount can exceed the appraised value by the amount of that financed fee.
This is particularly useful because USDA loans are already designed around 100% purchase financing for eligible borrowers. If the appraisal comes in above the purchase price, financing some eligible costs can reduce the amount of cash needed at settlement.
USDA also allows seller and other interested-party contributions toward eligible costs. Current USDA guidance generally limits those contributions to 6% of the sales price. They can cover eligible closing costs, prepaid items and, in some cases, the upfront guarantee fee.
Financing closing costs is not automatically the cheapest option. Adding $5,000 of costs to the loan means paying interest on that $5,000 over time. It can lower the upfront cash requirement, but it also raises the starting balance.
Conventional Loan Closing Costs
Conventional loans do not have a separate government closing-cost schedule. Most of what you pay comes from the lender, settlement process, property and location rather than from Fannie Mae or Freddie Mac.
That means a conventional purchase can include the same broad categories you would see elsewhere: lender charges, appraisal, title work, recording charges, taxes, insurance, escrow funding and prepaid interest.
You generally cannot just add purchase closing costs to a conventional loan beyond the amount allowed by the loan's LTV and transaction structure. In practice, buyers usually cover the costs with their own funds, eligible gifts, seller contributions, lender credits or a combination of those sources.
Seller credits are where conventional rules become more specific. Under Fannie Mae's current rules, the maximum financing concession for a primary residence or second home generally depends on LTV. It is 3% when LTV is above 90%, 6% when LTV is 75.01% through 90% and 9% when LTV is 75% or lower. Investment properties are generally capped at 2%.
Those limits apply to financing concessions, not every dollar the seller spends in the transaction. Costs that sellers customarily pay in the local market may be treated differently. Seller contributions also cannot be used to make your down payment, satisfy a minimum borrower contribution or meet reserve requirements.
Lender credits can cover some or all borrower-paid closing costs and prepaids. They often come through pricing, which means accepting a higher interest rate in exchange for more upfront credit. A credit can reduce cash due at closing, but it should be compared with the long-term cost of the higher rate.
Conventional refinance costs work differently because there is no home purchase price involved. Depending on the new loan amount, property value and applicable LTV limit, you may be able to roll eligible costs into the new balance. That reduces the immediate cash requirement but increases what you owe.
FHA Loan Closing Costs
FHA closing costs include many of the same expenses as a conventional mortgage, plus FHA mortgage insurance.
The upfront mortgage insurance premium, or UFMIP, is a program-specific charge based on the FHA base loan amount. You can pay it in cash or finance it into the mortgage. Financing it is common because it avoids adding the full premium to your cash-to-close requirement.
Annual mortgage insurance is different. Despite the name, the annual premium is generally paid through your monthly mortgage payment rather than as a standard closing cost. The duration depends on the original LTV, loan term and applicable FHA rules.
FHA also has relatively flexible seller contribution rules. Under FHA policy, interested parties can generally contribute up to 6% of the sales price toward the borrower's origination fees, other closing costs, prepaid items and discount points. The contribution can also be used toward the UFMIP.
That 6% contribution cannot be used to replace the borrower's minimum required investment. On a standard FHA purchase with a qualifying credit score of 580 or higher, the borrower still has to meet the 3.5% minimum investment requirement from eligible sources.
A seller credit can be especially useful on FHA because a low down payment does not automatically mean low cash to close. The borrower may still have title costs, appraisal charges, prepaids, escrows and other expenses on top of the down payment.
VA Loan Closing Costs
VA loans can require little or no down payment, but that does not make them a zero-cost mortgage.
The borrower can still have appraisal, title, recording, tax, insurance and other settlement expenses. The VA funding fee may also apply unless the borrower is exempt. The fee can be financed, which is different from most other purchase closing costs.
VA's fee rules can also reduce some borrower-paid charges compared with a transaction where the lender has more freedom to itemize administrative fees. At the same time, the exact closing-cost total still depends heavily on the lender, property and state.
Seller-paid costs can reduce the cash requirement substantially. The key is not to confuse ordinary seller-paid closing costs with VA seller concessions. Ordinary costs can be negotiated separately, while the 4% seller-concession limit covers a narrower group of benefits provided to the borrower.
VA's current rules around buyer-broker compensation also deserve attention. A temporary variance allows the veteran to pay reasonable and customary buyer-broker charges in qualifying markets, so those costs may appear in the transaction even though older VA materials describe brokerage fees as borrower-prohibited.
Jumbo Loan Closing Costs
Jumbo closing costs do not follow one national agency standard. The lender or investor sets the underwriting and fee rules.
The categories are familiar, but the dollar amounts can be larger because jumbo loans finance higher-priced homes. Title insurance is often based partly on the loan amount or property value, and prepaid taxes and insurance can be substantial on expensive properties.
Some jumbo transactions also require more valuation work. Depending on the loan amount, property and investor, the lender may require a second appraisal, appraisal review or other valuation documentation. That is not a universal jumbo rule, but it can add cost when required.
Seller contribution limits are also investor-specific. A lender may cap contributions based on LTV, occupancy, loan amount or property type. The same goes for whether a lender credit is available and how it affects pricing.
Jumbo borrowers often have significant assets, but that does not mean every dollar can be used interchangeably. Investors can impose reserve requirements in addition to cash needed for closing. A large seller credit does not necessarily reduce the amount of post-closing reserves the borrower has to document.
HELOC And Home Equity Loan Closing Costs
HELOC closing costs and home equity loan closing costs vary much more by lender than purchase mortgage costs do.
Possible charges include an appraisal or automated valuation, title search, title insurance, recording fees, taxes and lender charges. Some lenders absorb or waive part of these expenses, particularly on HELOCs.
A waived cost is not always gone permanently. Some HELOC agreements require you to reimburse certain third-party costs if you close the line within a specified period. That is sometimes described as an early-closure reimbursement or recapture provision.
Because there is no seller in a typical HELOC or home equity loan, seller concession rules do not apply. The main questions are which costs the lender charges, which it absorbs and whether any fees can be deducted from the proceeds instead of paid separately.
Refinance Closing Costs
Refinancing does not eliminate closing costs. You are taking out a new mortgage, so many of the same lender, title, appraisal and government charges can apply again.
A refinance closing cost breakdown can look similar to a purchase Loan Estimate, but there is an important difference: refinance costs can often be rolled into the new mortgage if the new balance remains within the applicable LTV and program rules.
That is why a refinance can sometimes be advertised as having little or no cash due at closing. The costs may still exist. They are simply being financed or offset with lender credits.
A lender-credit refinance works the same basic way as a lender credit on a purchase. The lender can provide credit toward closing costs, usually in exchange for different pricing. That can reduce the upfront expense but may mean accepting a higher rate.
If you are taking equity out at the same time, cash-out refinance closing costs reduce the net proceeds you receive. A $50,000 increase in the loan balance does not necessarily mean $50,000 reaches your bank account after liens, costs and other required amounts are paid.
The right comparison is not simply "cash due today" versus "no cash due today." Look at the new balance, rate, monthly payment and total cost of financing the fees.
Who Can Pay Your Closing Costs?
You do not necessarily have to pay every closing cost from your own bank account.
The seller can pay eligible costs within the rules of the mortgage program. Conventional limits vary by LTV and occupancy. FHA and USDA generally allow interested-party contributions up to 6% of the sales price. VA treats ordinary seller-paid closing costs separately from seller concessions and generally caps the concessions themselves at 4% of reasonable value.
A lender can also provide credits. Lender credits reduce the amount you pay upfront, but they are often connected to the interest rate. Compare the credit with the additional interest you could pay over the time you expect to keep the loan.
Gift funds may cover eligible closing costs on many mortgage programs. The donor and documentation rules depend on the loan type, and the lender needs to verify that the money is really a gift rather than an undisclosed loan.
Your earnest money deposit can also reduce what you still owe at settlement. If properly documented, earnest money already paid is generally credited in the final cash-to-close calculation rather than charged again.
Down payment assistance and other eligible secondary financing can sometimes help with closing costs as well, although those programs have their own restrictions.
The important number is the final cash to close, not just the line labeled "closing costs." Your down payment, deposits already paid, seller credits, lender credits and financed costs all affect what you actually have to bring to settlement.
The Bottom Line
Closing costs are broadly similar across mortgage types, but the rules for paying them are not.
Conventional loans use tiered seller-contribution limits. FHA allows up to 6% in interested-party contributions and lets you finance the upfront mortgage insurance premium. VA limits certain borrower charges, allows only the funding fee to be financed on a purchase and treats ordinary seller-paid closing costs separately from its 4% seller-concession cap. USDA can allow eligible closing costs to be financed when the property value supports the loan and generally allows seller contributions up to 6%.
The CFPB's 2% to 5% estimate is useful when you are first budgeting for a purchase, but your Loan Estimate is the better number once you apply. Review the individual charges, credits and final cash-to-close amount rather than assuming one percentage applies to every loan.
Frequently Asked Questions
How Much Are Closing Costs On A Mortgage?
Closing costs on a home purchase typically run about 2% to 5% of the purchase price, excluding the down payment, according to the CFPB. That is a planning estimate rather than a program rule. Your actual costs depend on the loan, lender, property, location, taxes, insurance and credits in the transaction.
Which Mortgage Has The Lowest Closing Costs?
There is no loan type that always has the lowest closing costs. VA limits certain borrower-paid fees, while USDA can allow eligible costs to be financed. Conventional, FHA and jumbo costs depend heavily on the lender and transaction. Compare Loan Estimates rather than choosing a loan based only on a general closing-cost estimate.
Can Closing Costs Be Added To A Mortgage?
Sometimes. USDA can allow eligible closing costs to be included in the base loan when the appraised value supports it, and its upfront guarantee fee can be financed. FHA allows the upfront mortgage insurance premium to be financed. VA purchase loans generally allow only the VA funding fee to be financed. Refinance transactions can often roll eligible costs into the new balance if the loan meets LTV and program requirements.
Can The Seller Pay All Of Your Closing Costs?
It depends on the loan type, the amount of the costs and the applicable contribution limit. FHA and USDA generally cap interested-party contributions at 6% of the sales price. Conventional caps vary by LTV and occupancy. VA does not cap ordinary seller-paid closing costs the same way it caps seller concessions, but concessions themselves are generally limited to 4% of the home's reasonable value.
What Is The Difference Between Closing Costs And Cash To Close?
Closing costs are the fees and other expenses tied to the mortgage and settlement. Cash to close is the final amount you need to provide at closing after accounting for the down payment, closing costs, deposits already paid, credits and any costs being financed.
Can You Use A Lender Credit To Pay Closing Costs?
Yes. A lender credit can cover some or all eligible closing costs. In many cases, the credit is connected to mortgage pricing, so accepting a larger credit can mean taking a higher interest rate. Compare both the upfront savings and the long-term interest cost.
Are Prepaid Taxes And Insurance Closing Costs?
They appear in the closing-cost section of your mortgage disclosures, but they are different from lender fees. Prepaids can include homeowners insurance, property taxes and prepaid interest. Your lender may also collect money to establish an escrow account.
Does A VA Loan Have Closing Costs?
Yes. VA loans can still have appraisal, title, recording, tax, insurance and other closing costs. A VA funding fee also applies to many borrowers unless they qualify for an exemption. VA limits certain charges and has specific rules for what the veteran can pay.
Can USDA Closing Costs Be Financed?
Yes, in eligible transactions. USDA allows reasonable and customary closing costs to be included in the loan when the appraised value is high enough to support the base loan amount. The upfront guarantee fee can also be financed and may increase the total loan above the appraised value by the amount of the financed fee.
Do You Pay Closing Costs When Refinancing?
Usually. A refinance creates a new mortgage, so lender, title, appraisal and recording costs may apply. You may be able to finance some or all of those costs into the new mortgage or use lender credits instead of paying them in cash.
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