Closing costs can add thousands to your home purchase or refinance. The good news? Many of these fees are flexible. If you're wondering whether you can negotiate closing costs, the answer is a resounding yes. In this guide, we’ll walk you through what can be negotiated, how to approach it, and why it's one of the smartest ways to save money on your mortgage.

What are closing costs?

Closing costs are the fees you pay out of pocket when finalizing a home loan. They usually total 2% to 5% of your loan amount and cover services like title searches, appraisals, lender fees, and government charges. 

These costs are listed in your loan estimate and finalized in your closing disclosure. While many buyers assume these are set in stone, the truth is you can negotiate a lot of closing costs with some effort and strategy.

Why negotiating matters

For a $400,000 home with a 10% down payment, closing costs can easily hit $8,000 to $12,000. Negotiating just a few fees could save you hundreds — or even thousands — of dollars. That’s money you could use for home repairs, furniture, or your emergency fund.

When you negotiate closing costs, you increase your financial flexibility and reduce the cash you need to bring to the table on closing day. It’s especially valuable for first-time homebuyers, tight-budget buyers, or anyone purchasing in a high-cost area.

What closing costs can be negotiated

Not every closing cost is negotiable, but several common charges are open to discussion. Here are the key ones to target:

#1: Lender fees

Lenders often charge origination, underwriting, processing, or application fees. These are some of the easiest to negotiate. You can:

• Ask for a waiver or discount
• Request a lender credit in exchange for a slightly higher interest rate
• Shop multiple lenders and use quotes to negotiate better terms

#2: Title services

Title insurance and title-related services are often provided by companies chosen by the lender — but you have the legal right to choose your own. By shopping around, you may find a more affordable title company. Be sure to compare:

• Title search fees
• Owner’s and lender’s title insurance premiums
• Settlement or escrow fees

#3: Attorney fees

In states where attorneys are required or commonly used for closings, you can often choose your own lawyer. Comparing rates or negotiating a flat fee can help reduce your total bill.

#4: Appraisal fees

While appraisal costs are usually set by third-party providers, some lenders may have flexibility, especially if an appraisal waiver is available based on your credit and down payment. You can also ask whether a prior appraisal can be reused if you're refinancing.

#5: Government recording and transfer fees

These are generally fixed, but in some cases, sellers or builders might agree to cover them as part of deal negotiations.

What closing costs are not negotiable

Some charges are outside the scope of negotiation because they’re dictated by government agencies or required by your loan program. These include:

• Property taxes
• Prepaid homeowner’s insurance
• Prepaid interest
• FHA, VA, or USDA loan program fees
• Transfer taxes (in most jurisdictions)

However, even if you can’t negotiate these fees directly, you can sometimes have them paid by someone else — which brings us to our next strategy.

Ask the seller to cover closing costs

One of the most effective ways to negotiate closing costs is by asking the seller to contribute. This is called a seller concession or seller credit. The amount varies by loan type:

• Conventional: up to 3%–6% of purchase price, depending on down payment
• FHA: up to 6%
• VA: up to 4%

Sellers are often open to covering some of your closing costs, especially in a buyer’s market or if they’re eager to close quickly. You can structure it as a seller credit in your offer. Just make sure the total credit doesn’t exceed actual closing costs, as any unused portion typically cannot go toward your down payment.

Use lender credits wisely

A lender credit allows you to reduce your out-of-pocket closing costs by accepting a slightly higher interest rate. This is essentially the opposite of buying points. It’s a good option if:

• You’re short on cash to close
• You plan to sell or refinance within a few years
• The difference in rate is small, but the savings are significant

Always run the numbers. While lender credits reduce upfront costs, they increase your monthly payment over time. A small rate bump could cost thousands more in interest over the life of the loan.

How to negotiate closing costs effectively

Negotiating closing costs isn’t just about asking. It’s about being strategic and informed. Here are some tips for success:

• Compare loan estimates: Get quotes from at least three lenders. Focus on origination fees and third-party costs.
• Ask questions early: Start the conversation about closing costs before locking in your rate.
• Be polite but firm: Let lenders know you’re comparison shopping and willing to move your business elsewhere.
• Work with a buyer’s agent: A good agent can help negotiate seller concessions and review fee breakdowns with you.
• Review your closing disclosure carefully: Look for discrepancies between your loan estimate and final figures. Question anything that seems off.

When negotiation is most successful

The ability to negotiate closing costs often depends on market conditions and your financial profile:

• Buyer’s markets: Sellers may offer more concessions when demand is low.
• Strong credit scores: Lenders may offer better deals to well-qualified borrowers.
• New construction: Builders often include closing cost incentives to help sell inventory.
• End of month or quarter: Lenders and agents may be more flexible when trying to meet quotas.

Being aware of timing and leverage points gives you a stronger position in negotiations.

Should you negotiate closing costs? 

Absolutely. While not every fee is negotiable, many are — especially lender fees, title services, and attorney costs. By shopping around, asking the right questions, and working with a savvy real estate agent, you can save thousands at the closing table.

Don’t assume you have to pay every fee that appears on your loan estimate. Know what to question, when to negotiate, and how to leverage seller or lender contributions to reduce your upfront costs.

Ready to compare lenders and see where you can negotiate closing costs? Use our free mortgage rate tables to compare rates and maximize your savings.

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