Are closing costs negotiable?
Contributed by Tom McLean
Nov 8, 2025
•7-minute read
If you’re taking out a mortgage to buy a home or refinance, you’ll pay closing costs. These fees related to funding your loan and transferring legal ownership are significant, usually totaling 3% – 6% of your loan amount.
But are closing costs negotiable? Can you reduce some of the fees you pay to your lender, title insurer, and other companies, or eliminate some closing costs entirely?
Yes, you can, but you first must understand which closing costs are negotiable and which are not.
What are closing costs?
Closing costs are fees you pay to your lender and third-party providers for services required when you close on a mortgage and buy a home. In addition to loan fees, closing costs are paid to real estate agents, real estate attorneys, appraisers, home inspectors, local government agencies, and title companies.
Closing costs are paid in addition to your down payment.
How much you’ll pay in closing costs varies, but you can expect to pay from 3% – 6% of your loan amount. Say you take out a home loan for $300,000 to buy a home. If your lender charges 3% of your loan amount, you’d pay $9,000 in closing costs. If your lender instead charges 6% of your loan amount, your closing costs would be $18,000.
What mortgage closing costs are negotiable?
Negotiating lower fees or convincing your lender to eliminate certain closing costs can save you money when you close on a mortgage. However, it’s important to know which closing costs are negotiable. Not all are. You might have better luck convincing your lender to reduce some of its fees than you will with third-party providers such as title insurance companies and appraisers.
Here is a list of closing costs you may be able to negotiate:
| Type of closing cost | What it is | How to lower the fee |
|---|---|---|
| Homeowners insurance | Mortgage lenders require you to purchase homeowners insurance before they’ll approve you for a loan. While the coverage must meet certain minimums, you usually can choose the insurance policy and insurer yourself. | The best way to save money on homeowners insurance is to shop around for the best deal. |
| Discount points | You can lower your mortgage interest rate by purchasing discount points. It varies, but a point usually costs 1% of your loan amount and lowers your mortgage’s interest rate by 0.25%. | You can avoid this fee entirely by not purchasing points. You’ll need to determine whether you’ll save more money by buying points and reducing your interest rate, or if it makes more financial sense to accept the original interest rate offered by your lender. This could depend on how long you plan on living in your home. |
| Origination fee | The origination fee is a one-time fee charged by your lender for processing your loan. | You can try to negotiate a lower origination fee with your lender. There is no guarantee that your lender will be open to this, but it never hurts to ask. |
| Underwriting fees | Lenders charge underwriting fees to cover the costs associated with verifying your information and processing your loan application. | You can shop around for a lender that doesn’t charge an underwriting fee, or you can ask your lender to reduce or waive this fee. |
| Application fee | Some lenders charge an application fee designed to cover the administrative costs of taking your loan application, such as checking your credit and verifying your financial information. | This is another fee that not all lenders charge. You can ask that your lender waive or reduce this fee. |
| Real estate commission | Traditionally, sellers paid the commission for both real estate agents in a transaction. That has changed, and who pays agents’ commissions is open to negotiation. | Buyers ask sellers to pay the commissions for both agents. Sellers might agree to this to make their home more attractive to buyers. This arrangement would be written into the final home sale contract. |
| Title insurance | A lender’s title insurance policy protects your lender if another person, company, or government body makes an ownership claim on your home. This can happen if your home’s previous owners failed to pay property taxes or didn’t pay contractors working on the residence. Lenders require that you purchase one of these policies when taking out a mortgage. | You can shop around for a title insurer that provides a lower-cost policy and ask your lender to use that insurer. Your lender might not agree to this and might insist on using a different insurer. But you can always ask. |
Which mortgage closing costs are nonnegotiable?
Some of the closing costs charged by third-party providers are not negotiable. You won’t be able to lower these fees or eliminate them.
| Type of closing cost | What it is | Why it’s nonnegotiable |
|---|---|---|
| Appraisal fee | Home appraisal fees are paid to a licensed appraiser who determines your home’s fair market value. | Lenders require an appraisal to make sure the home’s value justifies the loan amount. You can’t choose your own appraiser. Instead, your lender orders an appraisal through independent appraisal management companies. You’ll have to pay what your appraiser charges. |
| Credit check fee | When you apply for a mortgage, your lender will check your credit to make sure that you have a history of paying your bills on time. | Lenders will always check your credit. Because of this, you can’t eliminate this fee. |
| Government fees | Depending on where you are buying, you might need to pay for fees charged by local government bodies, including transfer and recording fees. | Because these fees are set by government agencies, they can’t be lowered or eliminated. |
| Courier fees | Your lender will charge courier fees if it must send your loan documents to other parties, including title insurers, real estate attorneys, or a borrower who is signing the closing documents in a different location. | These fees are typically set by lenders and can’t be negotiated. |
| Property taxes | You’ll often need to pay your portion of your home’s property taxes at closing. You might also need to pay a certain number of months of your estimated taxes to set up your mortgage’s escrow account. | The property taxes you pay each year are determined by local government agencies and can’t be negotiated. |
Steps for reducing your closing costs
Once you know which closing costs can be negotiated, you can work with your lender to try to reduce the fees you’ll pay at the closing table.
Here are some tips to help you prepare for this process:
Approach your lender
Within three business days of applying for a mortgage, your lender will provide a Loan Estimate, which estimates the fees you’ll pay to close.
Review the fees and ask questions. If a fee seems high, ask if it can be reduced. It’s easier to negotiate if you have already shopped around with more than one mortgage lender. If you have, you can compare the fees each lender is charging and ask them to lower the costs if they are higher.
You also can ask your lender to eliminate some of those closing costs that are negotiable. Your lender probably won’t drop all the fees that you question, and probably won’t reduce them all, either. But if you ask, they might eliminate or reduce some closing costs.
Ask the seller to contribute
You also can ask for seller concessions. This is when sellers agree to pay some closing costs that are traditionally paid by buyers.
Sellers might agree to this depending on if you are in a buyer’s market or a seller’s market. If the sellers have just listed the home and you are buying in a market in which homes are selling quickly, they might not be willing to pay any additional closing costs.
Roll your closing costs into your mortgage
If you are struggling to come up with enough cash to pay your closing costs up front, you might be able to roll these fees into your total loan amount.
Many lenders offer what are known as no-closing-cost mortgages, in which you don’t pay your closing costs up front. You still pay these costs, though, in the form of slightly higher mortgage payments because you will be borrowing a greater amount of money.
Say your closing costs on a $300,000 mortgage are $9,000. If you opt to roll these costs into your mortgage amount, you’ll borrow $309,000. To pay off your loan in the same number of years, you’ll need to pay a bit more each month. It varies, but your lender might charge a higher interest rate if you are taking out a no-closing-cost mortgage.
Research home buyer assistance programs
Some states offer down payment assistance programs that help borrowers with their down payment or closing costs. An example is the Pathway to Home Closing Cost Assistance Grant Program offered in California. This program provides up to $10,000 in grants for first-time home buyers who are part of an underserved community to use for closing costs.
As with the California program, most state home buyer assistance programs have specific requirements. Some require that you be a first-time buyer, while others limit the types of homes you can buy. Make sure to research the options provided by your state if you need financial relief from high closing costs.
When is the right time to negotiate closing costs?
There are times when buyers are in the best position to negotiate closing costs with lenders and sellers.
Lenders might be more willing to negotiate closing costs if you have a high credit score. It helps, too, if you are taking out a larger mortgage. That’s because you are an attractive customer, one less likely to miss payments and one who will pay plenty of interest over time.
If you are trying to convince sellers to pay some of your closing costs, it helps to negotiate during a buyer’s market where homes are selling more slowly. This provides more of an incentive for sellers to make concessions to get their homes sold. If you are trying to buy in a seller’s market, in which homes are selling quickly and for higher prices, be careful about asking for too many concessions. Sellers might move on to another offer.
The bottom line: Negotiating closing costs can save you money
Buying a home isn’t inexpensive. Negotiating closing costs charged by lenders could save you a significant amount of money. The key to doing this is to understand which costs are negotiable and which are set.
If you’re ready to apply for a mortgage, consider working with Rocket Mortgage. Apply for a loan with us online to start the process.
Dan Rafter
Dan Rafter has been writing about personal finance for more than 15 years. He's written for publications ranging from the Chicago Tribune and Washington Post to Wise Bread, RocketMortgage.com and RocketHQ.com.
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