How Much House Can I Afford? The 28/36 Rule Explained
The lending rule that decides your budget, what lenders check beyond it, and why the bank may approve more than you should spend.
Read articleClosing Cost Calculator
The cash you need at the table beyond your down payment — most buyers underestimate it.
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Closing costs typically run 2–5% of the purchase price
Typical Estimate (3%)
$12,000
Low Estimate (2%)$8,000
High Estimate (5%)$20,000
Includes typical lender fees, title and escrow charges, appraisal, and prepaid items. Actual costs vary significantly by state, lender, and loan type.
What's inside the 2–5%
Closing costs bundle lender charges (origination and underwriting fees), third-party services (appraisal, title search, title insurance, attorney fees), government recording fees and transfer taxes, and prepaid items — typically several months of property taxes and homeowners insurance deposited into escrow. Transfer taxes and title charges vary dramatically by state, which is why the honest estimate is a range.
How to pay less
Your Loan Estimate marks which services you can shop for — title insurance alone can vary by hundreds of dollars between providers. Lender fees are often negotiable, sellers can contribute credits in many markets, and some costs can be rolled into the loan (raising your balance and interest). Add this figure to your down payment when checking the Affordability Calculator, and see the ongoing payment with the Mortgage Calculator.
Frequently asked questions
What is included in closing costs?
Typical items include lender origination fees, appraisal, title search and insurance, attorney fees, recording fees, and prepaid items like property taxes and homeowners insurance escrow.
Why is the estimate a 2–5% range?
Closing costs vary widely by state, lender, and loan type. Taxes and title charges differ dramatically between states, which is why a percentage range of the purchase price is the standard estimate.
Can I reduce my closing costs?
Often, yes. You can shop for title insurance and other services, negotiate lender fees, ask the seller for credits, or roll some costs into the loan (which increases your loan amount and interest).
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