Trying to figure out what you will owe at the closing table in Arlington? You are not alone. Closing costs can feel confusing because they mix fixed fees, local taxes, and prepaid items that vary by loan and property. In this guide, you will learn what closing costs include, how they differ from your down payment, what is typical in Arlington, and smart ways to compare quotes and save. Let’s dive in.
Closing costs vs. down payment
Your down payment is your equity contribution toward the purchase price. Closing costs are the transaction fees and prepaids you pay at or before closing in addition to the down payment. They cover lender charges, title and settlement services, government recording and transfer charges, prepaids for taxes and insurance, and inspections.
For planning, buyers often budget roughly 2% to 5% of the purchase price for closing costs. The range depends on your loan type, purchase price, local taxes, and choices like discount points. Cash buyers or buyers with seller credits may be on the lower end.
What closing costs include
Buyer closing costs usually fall into these buckets:
- Loan-related fees: Origination or processing, underwriting, application, credit report, flood certificate, and the appraisal. Optional discount points can lower your rate but increase upfront costs. Some loans also have upfront mortgage insurance charges or a one-time VA funding fee (varies by eligibility and down payment, and can sometimes be financed).
- Title and settlement: Title search and exam, settlement or closing fee, lender’s title insurance policy (required by the lender), and an owner’s title insurance policy (optional but recommended). Recording fees and deed preparation are also included.
- Government recording and transfer charges: State and local recordation and transfer taxes or fees. Who pays what can vary by contract and custom. Always verify with the settlement agent for Arlington.
- Prepaids and escrow deposits: Portions of property taxes, homeowner’s insurance, and prepaid interest from the closing date to the first payment. Lenders often collect initial escrow reserves, commonly one to two months of taxes and insurance.
- Inspections and surveys: Home inspection, termite, radon, and other inspections you choose, plus a survey if needed. These are often paid before closing.
- Other possible costs: Attorney fees if you choose representation, wire fees, courier or notary, and any HOA transfer or move-in fees.
Virginia and Arlington specifics
In Arlington, closing cost practices can vary and are often negotiated in your contract. Sellers often pay some items in some transactions, but it is not guaranteed. Confirm who pays what in writing with your agent and settlement company.
Arlington County assesses local real estate taxes that are prorated at closing based on the settlement date. You will reimburse the seller for any prepaid period and begin funding your own escrow based on your lender’s requirements. For recordation and transfer taxes, Virginia uses a recordation and grantor’s tax structure. Exact rates and allocations can change, so your title company will confirm current amounts and how they apply to your purchase.
Buying owner’s title insurance is customary in Northern Virginia. You will be required to purchase a lender’s policy for your lender. Owner’s policies come in standard and enhanced forms that offer different levels of protection. Ask your title agent for an itemized quote that shows each policy premium and the closing fee so you can compare.
How much to budget
As a planning guide, many Arlington buyers set aside 2.5% to 4.0% of the purchase price for closing costs when using a conventional loan without discount points. Your total may be higher if you buy points, select an enhanced owner’s policy, or have larger prepaids. Your total may be lower with seller concessions or lender credits.
Remember, these are estimates. Your Loan Estimate and later Closing Disclosure will show the best numbers for your loan, title charges, and prepaids for your property and closing date.
Arlington examples by price
The following are illustrative examples to help you plan. Actual costs depend on your loan, lender and title company fees, and the property.
Example A — $600,000 purchase
- Illustrative total buyer costs: about 2.8% of price → ~ $16,800
- Lender fees and third-party charges: $4,500 (0.75%)
- Title and settlement charges: $3,600 (0.60%)
- Prepaids and escrow deposits: $6,000 (1.0%)
- Inspections and surveys: $600–$900
- Other: $100–$200
Notes: If the seller pays the owner’s title policy or other fees, your cash to close drops. If you buy discount points, add about 1% of the loan amount per point.
Example B — $850,000 purchase
- Illustrative total buyer costs: about 3.1% → ~ $26,350
- Lender fees and third-party charges: $6,800 (0.80%)
- Title and settlement charges: $5,100 (0.60%)
- Prepaids and escrow deposits: $11,200 (1.32%)
- Inspections and surveys: $800–$1,200
- Other: $150–$300
Example C — $1,300,000 purchase
- Illustrative total buyer costs: about 3.5% → ~ $45,500
- Lender fees and third-party charges: $9,100 (0.70%)
- Title and settlement charges: $8,450 (0.65%)
- Prepaids and escrow deposits: $25,000 (1.9%)
- Inspections and surveys: $1,500–$2,500
- Other: $400–$500
How cash to close works
Your cash to close is the sum of your down payment, total closing costs, and any prorations, minus credits and deposits. That means:
- Down payment
- Plus closing costs
- Plus or minus prorations and adjustments
- Minus any seller credits, lender credits, and your earnest money deposit
Confirm with your lender whether any costs are financed into the loan or covered by credits, and make sure your Closing Disclosure matches your expectations.
Compare lender quotes the right way
Federal rules require that lenders deliver a Loan Estimate within 3 business days after you apply and a Closing Disclosure at least 3 business days before settlement. Use these documents to compare offers and verify changes.
What to focus on in the Loan Estimate:
- Loan costs: Origination charges and any discount points
- Other costs: Appraisal, title, recording, and government charges
- APR and projected payments: Make sure mortgage insurance and escrow are included if applicable
- Estimated cash to close: Confirm credits and down payment are accurate
Before closing, compare your Closing Disclosure to your Loan Estimate. Ask your lender to explain any line that increases by more than a few hundred dollars or any new fee.
Compare title policies and fees
Title quotes can vary by policy type and how fees are bundled. To compare fairly, request a written quote that lists:
- Owner’s policy vs. lender’s policy premiums separately
- Standard vs. enhanced owner’s policy pricing and coverage differences
- Settlement/closing fee and any technology or remote notarization charges
- Recording fees and deed preparation
If you see big differences, ask each title provider to explain how they calculate premiums and what services are included.
Ways to reduce closing costs
There are several levers you can pull to bring costs down or shift who pays:
- Seller concessions: Ask the seller to cover some of your closing costs. Allowable limits vary by loan type. For example, FHA often allows up to 6% of the price, while conventional loans commonly cap concessions based on your down payment. VA loans allow concessions with specific rules. Always confirm the exact limit for your loan program.
- Lender credits: Some lenders offer credits in exchange for a slightly higher rate.
- Shop and compare: Get at least three Loan Estimates and at least two title quotes to find competitive fees.
- Avoid unnecessary points: Calculate break-even timing before paying discount points. If you will not hold the loan long enough, paying points may not make sense.
- Assistance programs: Look into Virginia Housing and local resources that may offer down payment or closing cost assistance if you are eligible. Program terms can change, so verify current availability.
Timeline and signing day
Here is what to expect as you approach closing in Arlington:
- After loan application, your lender issues a Loan Estimate within 3 business days.
- You complete inspections and the appraisal. You also select a title company.
- Your lender clears underwriting conditions and sets a closing date.
- You receive your Closing Disclosure at least 3 business days before settlement. Review it closely.
- Your title company provides exact cash-to-close instructions and wiring details. Always verify wiring instructions by phone using a known number to avoid fraud.
- On closing day, you sign loan and title documents, and funds are disbursed. Taxes are prorated to the date of settlement, and the deed and loan documents are recorded.
Buyer checklist
Use this quick checklist to stay organized and compare offers:
- Request at least 3 Loan Estimates for the same product, term, and down payment.
- Confirm whether quotes include discount points and what the rate would be with zero points.
- Ask lenders to itemize origination and underwriting fees. Watch for duplicate or vague charges.
- Get 2 or more title quotes showing owner’s and lender’s policies and the settlement fee.
- Verify recording and transfer charges and how they are allocated in your contract.
- Budget pre-closing cash for inspections, earnest money, and the appraisal.
- Review your Closing Disclosure line by line and compare it to your Loan Estimate.
- Confirm wiring instructions by phone with the title company. Never trust last-minute email changes.
- Ask about assistance programs early so you can meet any deadlines.
Buying in Arlington should feel clear and manageable when you know what to expect. With the right preparation and comparisons, you can plan your cash to close and avoid surprises.
If you want a local guide to help you review Loan Estimates, title quotes, and negotiation strategies, connect with Patricia Okolo for a personalized consultation.
FAQs
How much are buyer closing costs in Arlington?
- Many buyers budget roughly 2% to 5% of the purchase price, though totals vary by loan type, property taxes, title policy selection, and whether you receive credits.
Who pays transfer and recording taxes in Arlington, VA?
- It can be negotiated in the contract, and local practices vary; your settlement agent will confirm current amounts and who is paying which items for your deal.
Is an owner’s title insurance policy required in Virginia?
- No, it is optional for the buyer, but it is commonly purchased and recommended; the lender’s policy is required by the lender.
When do I get my Closing Disclosure?
- By federal rule, your lender should deliver it at least 3 business days before closing so you have time to review and ask questions.
Can I reduce my closing costs without raising my rate?
- You can shop lenders and title companies, negotiate seller concessions within program limits, and avoid paying discount points if they do not fit your timeline.
Can I roll closing costs into my mortgage?
- Some items, such as certain upfront mortgage insurance or points, may be financed, but many costs must be paid at closing or covered by seller or lender credits.
