The Real Number: 2%–4% of the Purchase Price

In Southern Utah, buyer closing costs typically run between 2% and 4% of the purchase price. On a $400,000 home, that's $8,000 to $16,000 on top of your down payment. The exact number depends on your loan type, lender, title company, and what you negotiate with the seller.

This is separate from your down payment. Many first-time buyers are surprised by this — they budget for the down payment and forget about closing costs entirely.

What's Included in Buyer Closing Costs

Here's a realistic breakdown of what you'll see on your settlement statement:

Lender Fees

  • Loan origination fee — 0.5%–1% of the loan amount. Some lenders charge a flat fee instead
  • Discount points — optional. Each point costs 1% of the loan amount and lowers your rate by roughly 0.25%
  • Underwriting fee — $400–$900
  • Credit report fee — $50–$100
  • Flood certification — $15–$25

Title and Escrow Fees

  • Title insurance (lender's policy) — required by the lender. In Utah, the buyer typically pays for the lender's policy; the seller pays for the owner's policy
  • Escrow/settlement fee — $400–$800, split between buyer and seller
  • Title search — $150–$300
  • Recording fees — $50–$150 for recording the deed and mortgage with Iron or Washington County

Prepaid Items

These aren't fees — they're costs you'd pay anyway, just collected upfront at closing:

  • Homeowner's insurance — typically 12 months prepaid. In Southern Utah, expect $1,200–$2,500/year depending on the property. Hurricane properties may cost more due to flood zone proximity
  • Property taxes — prorated from closing date through the end of the tax period. Iron County and Washington County rates differ
  • Prepaid interest — per-diem interest from your closing date to the end of that month
  • Escrow reserves — your lender collects 2–3 months of taxes and insurance to seed your escrow account

Government and Third-Party Fees

  • Appraisal fee — $450–$650 in Southern Utah. You usually pay this upfront before closing
  • Survey (if required) — $350–$600. Not always required but common on rural properties or acreage
  • HOA transfer fees — if applicable. Common in Sand Hollow, Coral Canyon, and newer Cedar City subdivisions

FHA, VA, and USDA Loan-Specific Costs

Government-backed loans add their own line items:

  • FHA — upfront mortgage insurance premium (UFMIP) of 1.75% of the loan amount, plus monthly MIP. The UFMIP can be rolled into the loan
  • VA — VA funding fee of 1.25%–3.3% depending on down payment and service history. Can also be financed into the loan. No monthly mortgage insurance
  • USDA — guarantee fee of 1% upfront plus 0.35% annually. Some rural properties in Iron County qualify for USDA loans

What You Can Negotiate

Buyers have more control over closing costs than most people realize:

  • Seller concessions — you can ask the seller to contribute toward your closing costs as part of the offer. This is common and perfectly standard. Limits: conventional loans allow up to 3%–9% depending on down payment; FHA allows up to 6%; VA allows up to 4%
  • Lender credits — some lenders offer credits toward closing costs in exchange for a slightly higher interest rate. Worth considering if you're short on cash
  • Shop your lender — lender fees vary significantly. Get at least 2–3 Loan Estimates and compare Section A (origination charges) line by line
  • Shop your title company — in Utah, the buyer can choose the title company. Fees vary by $300–$800 between companies

A Real Example: $400K Home in Cedar City

Here's a realistic closing cost estimate for a buyer putting 5% down on a $400,000 home with a conventional loan:

  • Loan origination: $2,000
  • Appraisal: $500
  • Title insurance (lender's): $650
  • Escrow fee: $400
  • Recording: $75
  • Homeowner's insurance (12 mo): $1,800
  • Property tax escrow: $1,200
  • Prepaid interest (15 days): $700
  • Other lender fees: $600
  • Estimated total: ~$7,925

Add your $20,000 down payment and you need roughly $28,000 to close. This is why knowing the full number matters before you start shopping.

How to Prepare

Ask your lender for a Loan Estimate as early as possible — ideally during pre-approval. This document breaks down every expected cost. Then, when you're under contract, you'll receive a Closing Disclosure at least 3 business days before settlement that shows the final numbers.

If you're buying in Cedar City, Hurricane, or Southern Utah and want to understand exactly what you'll need to bring to the table, reach out — I'll walk you through the numbers for your specific situation.