Costs & insurance
Closing costs
The one-time fees due when a mortgage closes — origination, appraisal, title, recording, and prepaid escrow items — typically 2–4% of the purchase price for a Michigan buyer.
What does closing costs mean?
Closing costs settle the mortgage and are separate from your down payment, falling on both sides of the table.
A Michigan buyer typically pays origination, appraisal, lender's title insurance, recording, and prepaid escrow items; the seller usually covers the state and county transfer tax and the owner's title policy.
The one big variable is the escrow prepaid, which swings with the county's property-tax rate and the month you close. Budget roughly 2.5% of the price plus prepaids on the buyer side, and estimate them before you make an offer.
A Michigan example
On the $285,000 median home, a buyer might see roughly $5,700–$11,400 in closing costs at 2–4%, plus prepaid escrow. The seller separately pays the $8.60-per-$1,000 transfer tax — about $2,451 — and the owner's title policy.
Common questions
Can closing costs be reduced?
Yes — seller concessions, lender credits in exchange for a slightly higher rate, and the title reissue rate on refinances all cut the cash you bring to the table. Ask your lender which apply to your loan type.
Related terms