How much are mortgage closing costs?

How much are mortgage closing costs? A good rule of thumb is 1.25%-1.5% of the loan amount.

But that’s not the whole story. You can reduce your closing costs by choosing a rate that’s higher than what today's rate “par” rate is and the lender will give you a credit that you can use to reduce your costs.

Conversely, you can pay the lender additional money up front in order to have an interest rate that is lower than the current par rate. This is often referred to as “buying down the rate.”