How Much Are Closing Costs?
Plan on 2–4% of your purchase price in closing costs in California. On a $700,000 home, that's roughly $14,000–$28,000, not including the down payment. The range is wide because California has very different costs depending on the county (transfer taxes vary), the loan size (some fees are percentage-based), and whether you buy down your rate with discount points.
Refinance closing costs run lower, typically 1.5–3% of the loan amount, because there's no transfer tax, no purchase-side title fees, and often no escrow setup if you keep the same servicer.
Lender Fees
These come from the mortgage company itself: origination fee (sometimes called a processing or underwriting fee), application fee (we don't charge one), credit report fee ($35-$75), and discount points if you choose to buy down your rate. Each point is 1% of the loan amount and typically reduces your rate by 0.25%-0.375%.
Lender fees are the most negotiable line on your loan estimate. Always shop at least 2-3 lenders and compare the lender fees side by side, they vary substantially.
Third-Party Fees
These are services the lender orders on your behalf and passes through to you at cost (or close to it): appraisal ($550-$900 in California, more for jumbo or complex properties), credit report, tax service fee (~$70), flood certification ($15-$25), and any required HOA documents fee from the management company.
Title and Escrow Fees (California-Specific)
In California, the escrow company holds funds and documents, and the title company insures the title. These are usually two different fees, even when handled by the same firm. Expect: lender's title insurance (required, paid by buyer in most California counties, ~0.4-0.6% of loan amount), owner's title insurance (optional but recommended), escrow fee ($600-$1,500), notary, and recording fees.
Title insurance is a one-time premium paid at closing that protects against future title disputes. It's relatively expensive on a per-policy basis but it's a one-and-done cost.
Transfer Taxes and Recording
California has a state documentary transfer tax of $1.10 per $1,000 of sale price. Many cities add their own city transfer tax, Los Angeles, Berkeley, Oakland, and San Francisco are notable examples with significant city transfer taxes. Who pays the transfer tax (buyer or seller) is regional custom; in most of Southern California, it's the seller, but it's always negotiable in the contract.
Prepaid Items
These aren't really 'fees', they're future expenses you're paying up front: per diem interest from the closing date to the end of the month, first year's homeowner's insurance premium, 2-12 months of property tax deposited into escrow, and 2 months of insurance reserves. Prepaids vary based on when in the month you close and what your tax cycle looks like.
Tip: closing toward the end of the month reduces your per-diem interest, which is one way to lower the cash you bring to closing.
How to Reduce Your Closing Costs
Lender credits. You can accept a slightly higher interest rate in exchange for the lender paying some or all of your closing costs. Useful if you're cash-constrained at closing or planning to refinance within a few years.
Seller credits. Negotiate during the purchase contract, many sellers will contribute toward closing costs to keep a deal together. Conventional loans cap seller credits at 3-9% depending on down payment; FHA caps at 6%.
No-cost refinance. Some refinance programs roll closing costs into the loan balance (you pay interest on them) or accept a slightly higher rate in exchange for the lender covering costs.
Closing-cost assistance programs. First-time buyer programs in California offer grants and silent second loans that cover some closing costs, CalHFA, MyHome Assistance, and city-specific programs.