06/10/2026
Understanding Closing Costs
When you buy a home, the purchase price is the big number — but it's not the only number. On closing day, you'll also pay what are called closing costs: a collection of fees that cover all the services needed to make the home officially yours.
For most buyers, closing costs come to roughly 2–5% of the purchase price. On a $600,000 home, that's somewhere between $12,000 and $30,000 — so it's worth planning for.
Here's what those fees typically go toward:
Lender fees — Your mortgage lender charges for processing and approving your loan. This can include an origination fee, appraisal fee, and credit report fee.
Title insurance — This protects you (and your lender) if anyone ever comes forward with a claim against the property's ownership history. Think of it as a one-time insurance policy that covers the entire time you own the home.
Legal/closing fees — A lawyer or title company handles the paperwork and the transfer of ownership. Their fee is included here.
Prepaid costs — These aren't really "fees" — they're things you're paying in advance, like your first year of home insurance and a few months of property taxes. You'd owe these eventually anyway; you're just getting a head start.
Your lender is legally required to give you a document called a Loan Estimate within three business days of your mortgage application. It will list all expected closing costs so there are no surprises at the end.
The good news: closing costs are often negotiable. Some lenders offer to roll them into your loan, and in some markets, sellers will agree to cover a portion. We can talk through your options as we get closer.
Any questions at all — I'm here!
Karen Mork
Broker
RE/MAX Garden City Realty Inc., Brokerage
905-341-5138
