Published 2026-05-08
If you're buying a $400,000 home, expect to pay between $9,000 and $16,000 in closing costs. The range is wide because closing costs vary by state, by lender, and by which fees your specific transaction includes. Federal HMDA data covering 4.8 million purchase mortgages in 2024 shows the median borrower on a loan in this price range paid about $11,400 in total closing costs. This guide breaks down exactly where that money goes, why some buyers pay $7,000 more than others, and what you can do about it.
Buyers in the $300,000 to $500,000 loan range paid a median of about $11,400 in total closing costs in 2024, according to HMDA data covering 4.8 million purchase mortgages. The 25th percentile paid $7,800. The 75th percentile paid $15,200. That spread of more than $7,000 between the typical low and high cost is not random. It reflects real differences in state law, lender pricing, and title insurance regulation.
A few specific examples from the data: a buyer in Indiana paid a median of $8,200 on a loan in this size range. A buyer in New York paid a median of $19,400. Both bought houses in the same price tier. The Indiana buyer didn't find a better lender. The New York buyer paid a 1.8% mortgage recording tax, higher transfer taxes, and a state-mandated attorney fee.
Closing costs on a $400,000 house break into seven categories. The first three are set by your lender. The next two are set by state or local law. The last two are largely fixed.
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The breakdown for a typical $400,000 purchase in a moderate-cost state with 10% down looks like this:
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The five most expensive states for a $400,000 purchase, by median total closing costs in HMDA data:
1. New York: $19,400. Driven by mortgage recording tax (1.8% on loans above $500K in NYC), mansion tax, and state transfer tax.
2. District of Columbia: $17,800. Recordation tax of 1.1% to 1.45% plus matching transfer tax on the seller side.
3. Pennsylvania: $14,900. Combined 2% transfer tax in most counties. Philadelphia adds another 1.278%.
4. New Jersey: $14,600. High Realty Transfer Fee plus attorney fees on most transactions.
5. Illinois: $13,200. Cook County and Chicago add municipal transfer taxes on top of state.
The five cheapest states:
1. Indiana: $8,200. No transfer tax. Indiana's constitution effectively prohibits one.
2. Missouri: $8,400. No transfer tax, also constitutionally protected.
3. Wyoming: $8,500. No transfer tax, small market with lower lender fees.
4. Nevada: $8,700. Transfer tax exists but is split between buyer and seller by custom.
5. North Carolina: $8,900. State law caps lender origination at 0.25% of the loan amount.
For everywhere in between, expect $9,500 to $12,500 on a $400,000 purchase. The remaining variance after state law comes from which lender you chose and whether you shopped title insurance.
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Four factors explain most of the gap between what you pay and what your neighbor pays.
Factor one: state and local taxes. A buyer in Indiana pays $0 in transfer tax. A buyer in Philadelphia pays $13,112 ($400K times 3.278%). That single line item accounts for most of the $11,200 gap between the cheapest and most expensive states.
Factor two: which lender you chose. Origination fees on a $400,000 loan range from $0 (some lenders charge zero) to about $4,000 (1% origination plus separate processing and underwriting fees). The HMDA data shows the median lender origination is $1,400, but 25% of lenders charge under $700 and 25% charge over $2,800.
Factor three: title insurance shopping. In the 25 states where title insurance is unregulated, identical coverage can cost $1,500 from one company and $2,300 from another. Most buyers use the title company their realtor or lender recommends. Most don't shop.
Factor four: loan type. FHA loans add an upfront mortgage insurance premium of 1.75% of the loan amount. On a $360,000 FHA loan (10% down on a $400K house), that's an additional $6,300 at closing. VA loans charge a funding fee of 1.4% to 3.6% depending on circumstances.
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A reasonable estimate for buyers in most states is 2.5% to 3.5% of the purchase price. On a $400,000 house, that's $10,000 to $14,000.
For more accuracy, start with the base and adjust for state and loan type. Add $2,500 to $5,000 if you're in NY, NJ, PA, IL, DC, MD, or any city with a local transfer tax. Subtract $1,500 if you're in IN, MO, OR, WY, MT, NM, AL, or MS (no transfer tax). Add 1.75% of your loan amount if you're getting an FHA loan (upfront MIP). If you're in TX, FL, OH, NM, or NC, your title insurance costs are fixed by state schedule, so don't budget shopping savings.
Worked example for a $400,000 conventional purchase in Texas with 10% down: $10,000 base, no transfer tax adjustment, no FHA adjustment. Estimated closing costs: $10,000. Actual Texas median in HMDA data: $9,700.
Worked example for a $400,000 conventional purchase in New Jersey with 10% down: $10,000 base plus $4,000 for high transfer tax and attorney fees. Estimated closing costs: $14,000. Actual New Jersey median: $14,600.
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The Loan Estimate is required within 3 business days of your application. It's a 3-page document listing every fee. Compare the total in section J ("Total Closing Costs") to the state median above.
If your Loan Estimate total is more than 10% above the state median, you have a problem somewhere. The most common culprits, in order of likelihood: origination fees above 1% of the loan amount, processing or underwriting fees over $500 charged separately from origination, title insurance significantly above the state median (only relevant in unregulated states), and discount points you didn't ask for (some lenders quietly add 0.25 to 0.5 points to make their rate look more competitive).
If your Loan Estimate looks reasonable, the next checkpoint is your Closing Disclosure, which arrives 3 business days before closing. Federal TRID rules limit how much certain fees can increase between the Loan Estimate and Closing Disclosure. If they violate those rules, they owe you a refund.
Don't wait for the Closing Disclosure to push back. The Loan Estimate is your strongest negotiating point because the lender hasn't yet committed resources to the transaction. Once they've ordered the appraisal, paid the title search, and processed the file, they're less willing to reduce their fees.
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Closing costs on a $400,000 house typically run $9,000 to $16,000 depending on your state, lender, and loan type. The median in HMDA 2024 data for loans in this price range was $11,400. Buyers in no-transfer-tax states like Indiana, Missouri, and Wyoming pay closer to $8,500. Buyers in New York City and Philadelphia can pay over $18,000.
Both. Buyers typically pay 2% to 5% of the purchase price ($8,000 to $20,000 on a $400K house) and sellers typically pay 6% to 10% (which includes the realtor commission). In some states the seller pays the transfer tax. In others the buyer pays. Your purchase contract specifies who pays what.
Sometimes. With a conventional loan, you can't add closing costs to the loan amount on a purchase, but you can get lender credits (the lender pays your costs in exchange for a slightly higher rate). On a refinance, you can usually wrap closing costs into the new loan balance. FHA loans allow seller-paid closing cost contributions up to 6%. VA loans allow up to 4%.
Indiana, Missouri, and Wyoming have the lowest median closing costs because they don't charge state transfer taxes. Median total closing costs in these states for a $400K loan run $8,200 to $8,500 according to HMDA data. North Carolina is also low because state law caps lender origination fees at 0.25%.
Plan for $14,000 to $16,000 to be safe. That's a slight overestimate but accounts for unusual costs like HOA transfer fees, survey requirements, manual underwriting fees, and regional surprises. Any money you don't spend becomes additional reserve or principal paydown. Better to overestimate than to scramble for funds 3 days before closing.
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