What Are Closing Costs And Why Do I Have To Pay Them?

When buying a home. in addition to the down payment, you’ll also have to pay closing costs.  These are miscellaneous fees charged by those involved with the home sale.  Examples are loan processing fees from the lender,  fees from the title company for handling the paperwork, or local government fees for recording the deed.  The amount of closing costs varies.  Expect to pay about 3% , but could be, say, $6000 on a $130,000 house. The range is all over the map — from 1 to 8% of the price of the home, though more typically 2-3%. These costs are significant — especially after you’ve already had to come up with a lot of cash for the down payment.