When buying a home, most buyers focus on saving for their down payment and budgeting for their future monthly mortgage payment. But there’s another important expense to prepare for: closing costs.

When buying a home, most buyers focus on saving for their down payment and budgeting for their future monthly mortgage payment. But one expense many buyers underestimate is closing costs.

In fact, according to recent surveys, many buyers continue to be caught off guard by the true upfront costs of purchasing a home. A 2025 Bankrate survey found that 81% of aspiring homeowners view down payment and closing costs as major obstacles to affordability, while a separate Clever Real Estate survey found that 45% of buyers were surprised by the closing costs associated with their purchase.

What Are Closing Costs and What Do They Cover?

Closing costs are the collection of fees and expenses paid when finalizing your home purchase. These costs are separate from your down payment and are paid to the various parties involved in processing and completing your transaction.

Closing costs can include:

• Government recording costs
• Appraisal fees
• Credit report fees
• Lender origination fees
• Title services
• Tax service fees
• Survey fees
• Attorney fees
• Underwriting Fees & Processing Fees
• Escrow fees
• Home inspection costs
• Property taxes
• Private Mortgage Insurance (PMI) - if applicable

Some of these expenses are lender-related fees, while others are prepaid costs associated with homeownership.

Be sure to ask your Greenway Loan Officer for a detailed breakdown of your estimated closing costs early in the mortgage process so there are no surprises later on.

How Much Should You Budget for Closing Costs?

Closing costs typically range between 2% and 5% of your home’s purchase price, though the exact amount can vary based on your loan type, lender, property location, taxes, and insurance costs.

Example:

If you purchase a home for $500,000:

• Estimated closing costs at 2% could be around $10,000
• Estimated closing costs at 5% could be around $25,000

If you’re purchasing a home above or below this price range, your closing costs will likely increase or decrease accordingly.

How Can You Best Prepare Yourself for Closing Day?

The best way to prepare for closing day is to understand the full picture of homeownership costs from the very beginning — including your down payment, monthly mortgage payment, and closing costs.

Working with trusted mortgage and real estate professionals can help make the process smoother and more predictable.

The Loan Officers at Greenway Mortgage are here to answer your questions, explain your options, and help connect you with trusted local real estate professionals throughout the process.

Bottom Line:

Buying a home is an exciting milestone, and understanding your costs upfront can help you feel more confident throughout the journey.

By planning ahead and working with an experienced mortgage team, you can avoid surprises and feel prepared when it’s time to close on your new home.

Ready to take the next step? Apply for a home loan with Greenway Mortgage today — it only takes a few minutes to get started.