Understanding Closing Costs in California: A Homebuyers’ Guide for 2026

When you’re on the path to buying a home, there are many steps to consider, and understanding the various costs involved can sometimes feel overwhelming. One of the most important — and often misunderstood — parts of the process is closing costs. In California, knowing what these costs are, when they’re paid, and who is responsible for them can help you plan confidently and avoid surprises at the closing table.

Closing costs are the fees and expenses required to finalize a real estate transaction. They are separate from your down payment and are typically due when ownership officially transfers to you.

How Much Are Closing Costs in California?

In most California home purchases, closing costs generally range between 2% and 5% of the purchase price. The exact amount depends on several factors, including the loan type, purchase price, county, and how costs are negotiated between buyer and seller.

Understanding what makes up these costs — and which ones may be flexible — allows buyers to make informed decisions early in the process.

Recurring vs. Non-Recurring Closing Costs

One helpful way to understand closing costs is to break them into recurring and non-recurring categories.

Non-Recurring Closing Costs (One-Time Fees)

These are fees you typically pay once at closing and do not repeat monthly:

• Loan origination and underwriting fees
• Discount points (if applicable)
• Appraisal fee
• Credit report fee
• Escrow fees
• Title insurance (lender and owner policies)
• Recording fees
• Transfer taxes (non-recurring and county-specific)
• Notary fees
• Upfront mortgage insurance (if applicable)
• Impounds / initial escrow setup(non-recurring)

Tax note: Discount points and certain loan origination fees may be tax-deductible. Buyers should always consult their tax advisor for guidance specific to their situation.

Recurring Closing Costs (Ongoing Expenses Collected at Closing)

These are costs that will continue after closing but are often collected upfront:

• Property taxes
• Homeowners insurance
• Mortgage insurance (if applicable)
• HOA dues (if applicable)

These recurring items are commonly collected as prepaid costs or placed into an escrow (impound) account to ensure future payments are made on time.

Who Pays Which Closing Costs in California?

In California, who pays which closing costs can vary by county and by local custom. Some fees are traditionally paid by the buyer, others by the seller — and many are negotiable depending on the terms of the purchase contract.

For a helpful county-by-county reference, Old Republic Title publishes a statewide guide outlining customary closing cost responsibilities:

📥 Download This Guide: California Closing Costs – Who Pays What

Fidelity National Title's California Closing Cost Guide provides a helpful overview of customary buyer and seller responsibilities throughout the state.

  👉 Download the guide here:
Who-Pays-What-California-Transfer-Tax-and-Fees-rev-121120.pdf

Please note: These are customary practices and may vary by county, city, or negotiated contract terms. Your realtor and escrow officer can explain how these costs apply to your specific transaction.

Common Closing Cost Components Explained

Loan Origination Fees

These fees cover the lender’s cost to process, underwrite, and fund the loan. A loan officer can help explain how these fees work and review available options — including whether lender credits may be appropriate based on your goals.

Appraisal Fee

Lenders require an appraisal to confirm the home’s value supports the loan amount. This fee is usually paid upfront during the loan process rather than at closing.

Title Insurance

Title insurance protects both you and the lender against ownership disputes, liens, or recording errors. Costs vary by county and purchase price.

Escrow Fees

Escrow companies act as neutral third parties, ensuring all documents and funds are handled correctly. Fees vary depending on transaction size and services provided.

Government Fees & Transfer Taxes

Recording fees and transfer taxes are charged by the county and can vary throughout California. Transfer taxes are non-recurring and are often negotiated between buyer and seller.

Homeowners Insurance

Lenders require proof of insurance before closing. The first year’s premium is often paid upfront as part of closing costs.

Inspection Fees

Home, pest, roof, and specialty inspections are typically paid outside of escrow. A Realtor helps coordinate inspections and explains which reports are commonly required based on the property type and location.

Loan Estimates & Final Closing Figures

Early in the loan process, your lender will provide an initial Loan Estimate (LE). This document outlines the estimated loan terms, projected monthly payment, closing costs, and clearly shows which fees are paid by the buyer, seller, or lender. Then, prior to signing your final loan documents, you’ll receive a Closing Disclosure (CD), which reflects the finalized figures for your loan and closing costs. Reviewing both documents carefully with your loan officer ensures you fully understand each fee, how it changed (if at all), and what to expect before you reach the closing table.  

When Are Closing Costs Paid?

Most closing costs are paid at closing, along with your down payment.

Common exceptions include:

• Appraisal fees
• Inspection reports

These are usually paid earlier in the transaction.

Ways Closing Costs Can Be Covered:

• Paid in cash at closing
• Offset with a lender credit (by accepting a slightly higher interest rate)
• Covered in part or full by a seller credit, negotiated by your realtor

Your loan professional can help review these options and explain how each impacts your monthly payment and long-term costs.

Closing Costs on a Refinance

On a refinance, the borrower pays all closing costs. These costs can typically be handled in one of three ways:

• Added to the loan amount (equity permitting)
• Covered with a lender credit
• Paid in cash at closing

Each option has trade-offs depending on equity, rate strategy, and long-term plans.

The Importance of Your Realtor and Loan Team

A successful home purchase is a team effort. Your realtor helps explain transaction-related fees, inspections, and local requirements, while your loan officer focuses on structuring financing options and clarifying how closing costs affect your overall picture.

When these professionals work together, buyers benefit from clarity, preparation, and fewer surprises.

Final Thoughts

Every real estate transaction is unique. Closing costs vary based on the property, county, loan program, and negotiated terms. Understanding how closing costs work in California empowers buyers to move forward with confidence.

If questions arise along the way, having experienced professionals available to explain options and provide guidance can make the process far smoother — especially in today’s market.

Contact Information

If you’d like help reviewing estimated closing costs or exploring ways to structure them, feel free to reach out:

Rob Clark
Home Loan Consultant
Firestone Financial Group

📞 209-227-7745
📞 559-476-9279
📧 rbrtclark53@gmail.com
🌐 https://www.robertclarkloans.com

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DRE #01148307
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Not a commitment to lend. Borrowers must qualify. Rates and terms subject to change. Other fees may apply. Consult your loan officer or realtor.