Closing Costs Unpacked: State-by-State Breakdowns for Today’s Buyers and AZ is on the lower side

If you’re planning to buy a home this year, there’s one expense you can’t afford to overlook: closing costs.

Almost every buyer is aware of them, but few know exactly what they cover or how different they can be depending on where you're buying. So, let’s break them down.

What Are Closing Costs?

Your closing costs refer to the additional fees and payments you incur when finalizing your home purchase. Every buyer has them. According to Freddie Mac, they typically include things like homeowner insurance and title insurance, as well as various fees for your:

• Loan application
• Credit report
• Loan origination
• Home appraisal
• Home inspection
• Property survey
• Attorney

National vs. Local: Why the Numbers Look So Different

When you search for information about closing costs online, you’ll often see a national range, usually 2% to 5% of the home’s purchase price. While that’s a helpful starting point if you’re working on your homebuying budget, it doesn’t tell the whole story. In reality, your closing costs will also vary based on:

• Taxes and fees where you live (like transfer taxes and recording fees)
• Service costs for things like title and attorney work in your local area

While the home price is obviously going to matter, state laws, tax rates, and even the going costs for title and attorney services can change what you expect to pay. That’s why it's essential to contact us at The Bergamini Group and Envy Mortgage in advance so you can accurately budget for the project. It can put you in control before you even start shopping.

To give you a rough ballpark, here’s a state-by-state look at typical closing costs right now based on those factors for the median-priced home in each state (see map below):

If you want a real number to help with your budget, your best bet is to talk to a local agent and a lender. They can run the math for your price range, loan type, and exact location.

And just in case you’re looking at your state’s number and wondering if there’s any way to trim that bill, NerdWallet shares a few strategies that can help:

• Negotiate with the seller. Ask for concessions, such as a credit toward your closing costs.
• Shop around for homeowner’s insurance. Very, very important to compare coverage and rates before committing.
• Check for assistance programs. Some states, professions, and neighborhoods offer help. Your agent and lender can point you to what’s available locally.