How Much Should I Budget for Closing Costs?

What Buyers in Hawaii Need to Know

If you’re planning to buy a home, one of the first questions to ask is how much should I budget for closing costs. Most buyers focus on the down payment, but closing costs are a separate set of expenses that can add up quickly if you’re not prepared. On Oahu, these typically range from 2% to 4% of the purchase price, depending on the loan and location. Here’s what to expect and how to plan ahead.

What Are Closing Costs?

Closing costs are the one-time fees and charges you pay when your home purchase is finalized. These are paid at escrow and are separate from your down payment.

Your closing costs may include:

• Escrow fees
• Title insurance
• Appraisal fees
• Lender origination fees
• Credit report fees
• Recording fees
• Homeowner’s insurance (paid upfront)
• Prepaid property taxes
• HOA transfer or setup fees (if applicable)

Some of these are fixed fees. Others, like insurance or tax prorations, depend on the home itself and your loan type.

How Much Should I Budget for Closing Costs?

Most buyers in Hawaii should plan to spend between 2% and 4% of the purchase price in closing costs. For example:

• On a $700,000 home, 2% to 4% would be $14,000 to $28,000
• VA and USDA buyers may pay less due to limits on what lenders can charge
• Jumbo loan buyers or those with more complex financing may pay more

Ask your lender for a Loan Estimate early in the process so you can see a personalized breakdown. Your escrow officer will also provide an updated final statement before you close.

Can Sellers Help with Closing Costs?

Yes, in some cases sellers may agree to cover part of your closing costs. These are called seller credits or concessions.

That said, seller credits are more common in slower markets or when a home has been on the market for a while. In competitive multiple-offer situations, asking for credits can make your offer less attractive. Your agent can help you decide whether it’s appropriate to request them.

Tips to Prepare for Closing Costs

• Get pre-approved before shopping so you have an accurate estimate
• Ask your lender early about expected fees and tax prorations
• Keep some savings aside so you’re not caught off guard
• Read your Loan Estimate and Closing Disclosure carefully
• Ask questions if anything seems unclear

The Bottom Line

Closing costs are a part of every home purchase, but they don’t have to be confusing or overwhelming. Knowing what to expect and budgeting early can help you feel more in control and ready to move forward with confidence.

If you’re just getting started and want a step-by-step look at the process, download my free Home Buyer Roadmap. It’s a simple, local guide that covers everything from your first showing to the final signature at closing.

Still have questions? I’m here to help you navigate the numbers and take the next step with clarity.