Closing costs can sneak up on you, especially in a fast Arlington market. You plan for your down payment, then see a second number due at closing that feels less clear. You are not alone. Once you understand what makes up closing costs, how they work in Virginia, and where you can negotiate, you can budget with confidence and avoid surprises. In this guide, you will learn typical ranges, Arlington specifics, and practical ways to reduce what you pay. Let’s dive in.

What closing costs are

Closing costs are the cash you pay at settlement in addition to your down payment. They include lender fees, third‑party title and settlement charges, government recording and transfer costs, and prepaid items like insurance and property taxes.

As a rule of thumb, budget 2% to 5% of the purchase price for buyer closing costs. Your actual number depends on your loan type, the title insurance setup, the closing date, and any credits from the seller or lender.

How much to budget in Arlington

Most Arlington buyers fall somewhere within that 2% to 5% range. The bottom of the range is more likely if you receive seller or lender credits or if the seller pays for the owner’s title insurance policy. The higher end happens when you buy discount points, your prepaids are larger, or you pay for the owner’s title policy yourself. Always ask your lender for a written estimate so you can compare options early.

What you will see on your Closing Disclosure

Your lender will give you a Loan Estimate within three business days of application and a Closing Disclosure before settlement that shows exact numbers. You can review how these documents work on the Consumer Financial Protection Bureau’s pages for the Loan Estimate and the Closing Disclosure.

Lender fees and loan costs

• Origination or lender fee. Often 0.5% to 1.5% of the loan amount, or a flat fee.
• Application, processing, credit report, and underwriting fees. Typically small flat amounts. Some lenders bundle these.
• Appraisal. In Arlington, many appraisals run about $400 to $800 depending on property type and complexity.
• Discount points or rate buydown. Optional. One point equals 1% of the loan amount if you choose to lower the interest rate upfront.
• Mortgage insurance. FHA loans may include an upfront premium, and some products allow an upfront MI charge. Conventional PMI is usually monthly.

Title and settlement charges

• Title search or exam. One‑time fee to research the chain of title.
• Settlement or closing fee. Paid to the title or settlement company that conducts your closing.
• Title insurance. Lender’s policy is typically required if you finance. An owner’s policy is optional for you but commonly recommended. In Northern Virginia, including Arlington, sellers often pay for the owner’s policy by custom, but it is negotiable.
• Title endorsements and small administrative charges.

Government recording and transfer costs

• Recording fees. The county charges to record your deed and mortgage. These are usually modest flat amounts per document.
• Transfer and recordation taxes. Virginia collects state recordation and grantor taxes, with local recording procedures. Exact formulas and current rates should be confirmed with the Virginia Department of Taxation’s recordation tax and deeds and grantor’s tax pages.
• Real estate tax proration. Taxes are prorated based on your closing date and the county billing cycle. You may reimburse the seller for prepaid portions or receive a credit if the seller has not paid.

Prepaids and escrows

• Prepaid interest. Interest from your closing date to the first payment due date.
• Homeowners insurance. Often one year paid at closing or collected into escrow.
• Property tax escrow. Lenders may collect a cushion, often a couple of months of taxes, to seed your escrow account.
• HOA or condo items. For condos or HOAs, you may see a resale certificate, transfer or move‑in fee, and the first month of dues.

Other possible items

• Survey fee, if required.
• Pest or wood‑destroying insect inspection for certain loan programs.
• Optional attorney review. Virginia closings are commonly handled by title companies, and using an attorney is your choice.
• Courier, wire, or expedited recording fees in small amounts.

Arlington and Virginia specifics to check

• Owner’s title insurance custom. In Arlington and much of Northern Virginia, sellers often pay for the owner’s policy. This is not guaranteed. Confirm what your contract states.
• State and local taxes. Virginia charges state recordation and grantor taxes, plus local recording fees. Confirm exact current rates and calculations with the Virginia Department of Taxation and your title company before you finalize your budget.
• Real estate tax proration. Ask your title company how Arlington’s billing dates affect your proration at closing.
• HOA and condo documentation. Many Arlington condos require resale certificates and processing fees. Request these estimates early if you are buying a condo or a home in an HOA.

Seller credits and loan program limits

A seller credit is a negotiated amount the seller pays toward your allowable closing costs and prepaids at settlement. This credit appears on your Closing Disclosure and reduces your cash to close. Lenders limit how large the credit can be based on your loan program and down payment. Conventional, FHA, VA, and USDA loans each have their own rules, and some restrict which items a credit can cover. To use credits effectively, ask your lender to confirm the maximum credit allowed for your loan and how it can be applied. Your title company will show the credits on your settlement statement.

Smart ways to reduce your cash to close

• Negotiate a seller credit within your loan program’s limits.
• Compare lenders for origination fees, rate options, and possible lender credits.
• Confirm whether the seller will pay the owner’s title insurance policy, a common Northern Virginia practice.
• Ask your title company to explain each fee and whether any are optional or adjustable.
• Consider whether buying points makes sense for your timeline, since points raise closing costs.
• Explore Canopy Credits. Canopy Credits package potential lender, title, or settlement savings applied at closing. See if you qualify and confirm with your lender and title company how any third‑party credits can be combined with seller concessions to stay within program limits. Learn more by contacting us about Canopy Credits at James Buckley.

Illustrative closing cost examples

These examples are illustrative. Ask your lender for a Loan Estimate and your title company for a localized estimate for Arlington.

Lower‑priced Arlington condo example

Purchase price: $400,000

• Lender fees and loan costs: $2,000 to $6,000 (about 0.5% to 1.5%)
• Appraisal: $450 to $700
• Title and settlement, including lender’s title policy: $800 to $2,500
• Owner’s title policy: $0 to $2,000 (often seller paid, but negotiable)
• Recording and transfer taxes: variable, typically several hundred dollars, confirm locally
• Prepaids and escrows: $1,500 to $4,000
• HOA or condo transfer and resale documents: $200 to $700
• Estimated buyer total before down payment: roughly $5,000 to $13,000, about 1.25% to 3.25% of price

Typical Arlington single‑family example

Purchase price: $700,000

• Lender fees and loan costs: $3,500 to $10,500 (about 0.5% to 1.5%)
• Appraisal: $450 to $900
• Title and settlement: $1,200 to $3,500
• Owner’s title policy: $0 to $3,500 (often seller paid, but varies)
• Recording and transfer taxes: variable, confirm with your title company
• Prepaids and escrows: $2,500 to $6,000
• Estimated buyer total before down payment: about $8,000 to $24,000, roughly 1.1% to 3.4% of price

Higher‑end Arlington home example

Purchase price: $1,000,000

• Lender and loan costs: $5,000 to $15,000 (about 0.5% to 1.5%)
• Title and settlement: $1,500 to $5,000
• Owner’s title policy: $0 to $5,000 (often seller paid at higher price points too)
• Prepaids and escrows: $4,000 to $10,000
• Estimated buyer total before down payment: about $12,000 to $40,000, roughly 1.2% to 4% of price

Your next steps

• Request a written estimate. Ask your lender for a Loan Estimate within three business days of applying.
• Get a title fee quote. Ask a local Arlington title or settlement company for their fee schedule and a sample quote, including title insurance options.
• Decide on owner’s title insurance. Confirm in your offer who will pay for the owner’s policy.
• Confirm seller credit limits. Your lender will tell you the maximum allowable credit for your loan type and down payment.
• Plan prepaids with your timeline. Your closing date affects prepaid interest and tax proration.
• Review your final numbers. Your lender will provide a Closing Disclosure before settlement.

When you are ready to run the numbers on a specific home or want to negotiate credits with confidence, connect with James Buckley for clear guidance and local options.

FAQs

Who usually pays the owner’s title insurance in Arlington?

• In much of Northern Virginia, sellers often pay for the owner’s title policy, but it is a negotiable contract term. Confirm what your contract specifies and verify with your title company.

How much should I budget for closing costs in Arlington as a buyer?

• A practical range is 2% to 5% of the purchase price before down payment. Your total depends on loan type, title insurance setup, prepaids, and any seller or lender credits.

Can seller credits cover all of my closing costs?

• Possibly. Loan programs set limits based on your loan type and down payment, and lenders must approve credits. Ask your lender for the maximum credit allowed and how it can be applied.

Are Virginia transfer and recordation taxes high for buyers?

• Virginia charges state recordation and grantor taxes plus local recording fees. Amounts vary by document and change over time. Confirm current rules on the Virginia Department of Taxation’s recordation tax page and with your title company.

How do I get exact closing cost figures before I make an offer?

• Ask your lender for a Loan Estimate and request a preliminary fee quote from a local title company. These documents show the line items you will pay at closing.