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20 Proven Strategies for Negotiating Closing Costs!

20 Strategies for Negotiating Closing Costs
20 Strategies for Negotiating Closing Costs
Brian Reese
July 29, 2023

Closing costs are the inevitable means to an end when buying a home.

But what about negotiating closing costs, potentially saving you and your family thousands of dollars?

Good news, you absolutely can!

In this post, we will deep-dive the top 20 little-known strategies to reduce or lower your closing costs.

What Are Typical Closing Costs?

What Are Typical Closing Costs?

There are two types of closing costs: (1) Mortgage Loan Costs and (2) Other Fees and Expenses.

Here’s a general breakdown of what you can expect to see on your Loan Estimate:

Category 1: Mortgage Loan Costs

Loan Origination Charges:         

  • Loan Origination Charge
  • Points Credit/Charge

Loan Fees:         

  • Appraisal Fee
  • Credit Report Fee
  • Flood Certification
  • Title Search and Lenders Title Insurance
  • Home Inspection
  • Postage/Courier
  • Survey
  • Attorney fees for closing and settlement
  • Miscellaneous required services

Taxes and Government Fees:    

  • Government Recording Fee
  • Transfer Taxes

Category 2: Other Closing Costs

Prepaid Fees:    

  • Pre-Paid Homeowner’s Insurance (12 months)
  • Up-Front Mortgage Insurance Premium
  • Pre-paid Daily Interest Charges 

Initial Escrow Payment at Closing:

  • Escrow Homeowner’s Insurance (2 months)
  • Escrow Property Taxes 


  • Owner’s Title Insurance

How Much Are Closing Costs?

How Much Are Closing Costs

Closing costs typically range between 3% and 6% of your total mortgage loan amount.

Here’s a simple example for a $500,000 home with a 20% down payment and a $400,000 loan.

  • Home price: $500,000
  • Down payment: $100,000 (20%)
  • Mortgage loan: $400,000
  • Closing costs low end (3%): $12,000
  • Closing costs high end (6%): $24,000

Want to quickly calculate your estimated closing costs?

Use this awesome free online closing costs calculator.

Can You Negotiate Closing Costs?

Can You Negotiate Closing Costs

Yes, you can!

You can negotiate lots of closing costs; however, here’s a list of the easiest fees to reduce:

  • Loan origination fees
  • Loan points/credit fees
  • Title Search and Lenders Title Insurance     
  • Home Inspection
  • Postage/Courier          
  • Survey
  • Attorney closing and settlement fees
  • Miscellaneous required services

How to Reduce Closing Costs: 20 Awesome Strategies for Negotiating Closing Costs!

How to Reduce Closing Costs

Here’s a list of the top 20 strategies to reduce your closing costs this year:

  • #1. Shop multiple lenders: Get quotes from multiple lenders to compare and find the most cost-effective option. You can negotiate loan origination fees and the points. For example, you can get lender credits. You could opt in to take a higher interest rate, which will start to give you closing costs credits. This is a great idea if you don’t plan on being in the home long, don’t have a lot of cash on hand or plan on refinancing quickly. The ball is in your court so get creative.
  • #2. Negotiate with the seller: This is a common one many home buyers miss! You can negotiate with the seller to pay for some closing costs on your behalf through what’s called seller credits or sellers concessions. Your realtor will be able to negotiate this on your behalf. Everything is negotiable, especially in a buyer’s market.
  • #3. Look for lender promotions: Inquire about any special offers or discounts that lenders may have on closing costs. For example, District Lending has some crazy offers and discounts right now including no closing costs, 1% down payment, rate defense, 3 year guarantee, 18 day closing, price match guarantee, and realtor credits. *Terms and conditions may apply for any one or more of these offers.
  • #4. Opt for a no-closing-cost mortgage: Consider a mortgage loan with a slightly higher interest rate that covers some or all the closing costs. Again, you determine the type of loan, the rate, and your down payment. You have the power to negotiate!
  • #5. Review the Loan Estimate: Deep dive the Loan Estimate provided by your lender and discuss any unclear or unnecessary fees. Don’t forget that nearly everything is negotiable (some fees are unavoidable though).
  • #6. Waive any unnecessary fees: Negotiate with the lender to remove or reduce fees that may not be mandatory. Get creative. Ask questions. Remember, if you don’t ask the answer is always no!
  • #7. Check for local programs in your area: Do online research and look for buyer assistance programs in your area that can help with closing costs. They do exist if you’re willing to do your homework!
  • #8. Evaluate different loan types and options: Explore various mortgage loan programs to find one with lower closing costs that suits your needs. For example, maybe you qualify for a VA loan and don’t even know it?
  • #9. Own the closing date: Schedule the closing towards the end of the month to reduce prepaid interest costs! Ask and you shall receive.
  • #10. Use your existing banking relationship: Long-standing customers or special relationships with a bank may qualify you for discounts or better terms. Ask!
  • #11. Compare title insurance providers: Get quotes from multiple title insurance companies to find the best rates. They are not equal, and you can shop around!
  • #12. Consider a cash-out refinance: If refinancing, inquire about streamlined or low-cost refinance options. Check out a cash-out refinance option.
  • #13. Get a smaller loan amount: Reducing the loan amount naturally leads to lower closing costs. For example, if you put more cash down, you’ll reduce your total closing costs.
  • #14. Check your employer benefits: Some employers offer homeownership assistance programs that may cover closing costs. Ask your HR department if your company has any programs to help!
  • #15. Negotiate with third-party service providers: You can negotiate fees with appraisers, inspectors, or other service providers involved in the closing process. Ask!
  • #16. Request a reissue rate for title insurance: If the property has title insurance within a certain period you may be eligible for a discount on title insurance. Ask your title company!
  • #17. Pay with cash: Cash is king! If you can afford it, paying cash for the property can eliminate some closing costs related to your mortgage loan.
  • #18. Check for tax deductions: Some closing costs may be tax-deductible, so consult with a tax advisor to explore potential savings. You’ll need to do some legwork on this one.
  • #19. Use a real estate agent rebate: Some real estate agents offer rebates that can help offset closing costs. Ask your real estate agent for a rebate!
  • #20. Ask to use a lender’s preferred realtor: Some lenders have a preferred realtor network. For example, if you work with one of our preferred realtors, he/she will apply part of their commission towards closing costs.

Want a Great Low Rate with Zero Lending Fees? WE CAN HELP!

Josh Rapaport District Lending
  • District Lending is on a mission to disrupt the traditional mortgage industry. Buying a home can be incredibly frustrating so we decided to make it EASY through our technology and exceptional customer service!
  • Lower rates. Zero lender fees. As a mortgage broker, we work with over 90 lenders (banks) on your behalf. This means that consumers have more options to choose from, making it easier to find the best possible loan and rate. What makes us different is that we’re able to offer great low rates to consumers every single day (we have very low overhead with no layers of overpaid middle management).
  • We’re extremely fast to close, but never cut corners. We’ve engineered our process to close a loan in as little as 10 days. We also monitor our competitors’ rates and always make sure ours are lower.

>> Click HERE to get a great low mortgage rate in 60 seconds or less!

Josh Rapaport District Lending
Josh Rapaport – Founder & CEO @ District Lending

After working in the mortgage industry for 20 years, I started District Lending to deliver consumers lower rates and to arm them with the power to make confident financial decisions. That’s also why I’m keen on making the buying and refinancing experience as seamless and stress-free as possible. I value honesty, so I gladly share my rates with consumers right on the website. Our service is transparent, and we prioritize looking out for the client’s best interest.”

– Josh Rapaport, CEO and Co-Owner, District Lending

Brian Reese United States Air Force
Brian Reese United States Air Force

“As a military veteran, I’ve made it my life’s mission to help people live happier and wealthier lives. District Lending brings this mission to life. We believe in integrity, honesty, and transparency, which is why you’ll see our rates right on our website. You’ll find lower rates and zero lending fees, which means you can buy your dream home for less. The savings are passed on to you — the way it should be.”

– Brian Reese, Advisor and Co-Owner, District Lending

About the Author

Brian Reese Entrepreneur

Brian Reese is a senior advisor and co-owner at District Lending. He is one of the world’s leading experts in veteran benefits, having helped millions of veterans secure their financial future since 2013. Brian is the founder VA Claims Insider, an education-based Coaching & Consulting company whose mission is to educate and empower veterans to get the VA disability benefits they’ve earned for their honorable service. A former active-duty air force officer, Brian deployed to Afghanistan in support of Operation Enduring Freedom. He is a distinguished graduate of management of the United States Air Force Academy and earned his MBA as a National Honor Scholar from the Spears School of Business at Oklahoma State University.

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