Closing costs, line by line — and who can pay them

Closing costs typically run 2–5% of the loan amount. That is a wide range because it bundles together three very different kinds of money: fees for work performed, money held in escrow that is still yours, and prepaid items you would owe anyway.

Lender and third-party fees

• Origination and underwriting — the cost of processing the loan.
• Appraisal — typically $550–$800 in the Charlotte market, paid to an independent appraiser.
• Credit report, flood certification, tax service — small fixed costs.
• Title search, title insurance and attorney fees — in North Carolina, an attorney handles closing.
• Recording fees and transfer taxes — paid to the county.

Prepaids and escrows

You will prepay a year of homeowners insurance and some months of property taxes into an escrow account, plus interest from your closing date to the end of the month. This money is not a fee — it is your own money, sitting in an account that pays your bills. It is also the reason closing late in the month means less cash at the table.

Seller concessions

A seller can contribute toward your closing costs, and it is written into the offer, not negotiated afterward. Program limits apply — generally 3% on a low-down-payment conventional loan, up to 6% on FHA and VA. In a market where a house has been sitting, asking for concessions is frequently more achievable than asking for a price reduction, and it does more for your cash position.