Understanding Closing Costs on New Construction Homes
Buying a brand‑new home is exciting — a place that’s never been lived in, uniquely your home from the very first day. According to U.S. Census Bureau data, approximately 1.4 million housing units were completed in 2025, indicating that many families are choosing new construction for their next home.
Like any major purchase, buying a home requires planning and out-of-pocket costs. around the costs involved. As a new construction buyer, you’ll want to understand what closing costs are, how they’re calculated, where you may be able to reduce them and how LGI Homes® can help take some of that cost — and the stress — off your plate.
What Are Closing Costs?
The day you finalize your home purchase is called the “closing” — when you sign the final documents and the home officially becomes yours. Closing costs are the one‑time fees you pay at that meeting to cover the services that made the sale possible, such as lender fees, title work, the appraisal and more.
Closing costs are separate from the home's price and your down payment. The homebuilder doesn’t keep these fees, but in some cases, your builder may agree to pay some or all of them on your behalf as an incentive.
What Do Closing Costs Include?
Closing costs typically include some combination of the following line items:
- Origination fee – What your lender charges to process and underwrite your loan.
- Appraisal fee – Pays a third‑party appraiser to confirm the home’s market value.
- Processing or underwriting fee – Covers the lender’s review of your application.
- Credit report fee – Pays for pulling your credit history for the loan.
- Title search and examination – Confirms the home has a clear, marketable title.
- Title insurance – Protects you and your lender against covered title issues after closing.
- Homeowners insurance premium – Typically, your first year’s policy is paid at closing.
- Notary fees – For officially witnessing your loan documents.
- Prepaid interest – Interest that accrues between closing day and your first mortgage payment.
- Survey – Sometimes required by the lender to confirm property boundaries.
- Property taxes – Often a partial‑year prepayment held in an escrow account that will pay ongoing taxes and insurance.
- Discount points – Optional upfront fees you can pay to reduce your interest rate.
- Attorney fees – Required in some states, not in others, for handling the closing or drafting documents.
Not every fee will apply to every buyer or every loan. Your Loan Estimate and Closing Disclosure will list the specific charges, or closing costs, associated with your transaction.
Fees Related to the Property
These charges are tied directly to the home you’re buying, primarily the appraisal and, in some cases, a survey or home inspection.
A licensed appraiser determines the home’s market value, which helps set the maximum amount your lender is willing to finance. For a new construction home from a reputable builder, many buyers rely on the builder’s quality controls and municipal inspections, but some builders, like LGI Homes, still choose to hire an independent home inspector for added peace of mind.
Survey requirements vary by state, lot and lender. In some areas, an existing survey can be used; in others, a new survey may be required.
Fees Related to the Mortgage
These are your lender’s fees — application, origination, processing, underwriting and the credit report — for evaluating your application and funding your loan.
Loan origination fees typically run between about 0.5% and 1% of your loan amount. On a $300,000 loan, your closing costs may look like this:
|
0.5% |
$300,000 × 0.5% |
$1,500 |
|
1.0% |
$300,000 × 1.0% |
$3,000 |
You may also see a charge for “discount points” if you choose to pay more at closing in exchange for a lower interest rate.
*Always compare lenders, request itemized estimates and ask what each charge is for — most lenders will review your closing costs and explain every line.
Legal and Title Fees
Most legal‑related fees in a home purchase are tied to your home’s title — confirming ownership and recording the transfer into your name.
- Title search and examination – A title company or attorney reviews public records to confirm there are no outstanding liens or ownership claims.
- Title insurance – Policies that protect the lender, and optionally the buyer, against covered title issues that may arise in the future.
- Recording fees – Charges to record the deed and mortgage documents with the local government.
- Attorney fees – In some states, an attorney is required to oversee the closing or prepare certain documents; in others, title or escrow companies handle the process.
Your New Home Consultant or lender can confirm whether your state requires an attorney and what to expect for those fees.
How Can I Estimate My Closing Costs?
Closing costs depend on your loan type, home price, location and which lender you choose, so the most reliable estimate comes from your Loan Estimate — a standardized form your lender must provide within three business days of receiving your loan application.
As a planning rule of thumb, many homebuyers can expect closing costs to land between about 2% and 5% of the home’s purchase price. On a $300,000 home, that range looks like:
|
2.0% |
$300,000 × 2.0% |
$6,000 |
|
3.0% |
$300,000 × 3.0% |
$9,000 |
|
4.0% |
$300,000 × 4.0% |
$12,000 |
|
5.0% |
$300,000 × 5.0% |
$15,000 |
Once your Loan Estimate is in hand, walk through it line by line with your lender. Ask about anything you don’t understand — a good lender welcomes questions and can show you which fees are fixed and which may be negotiable or impacted by your choices.
Does the Home Buyer Pay All of the Closing Costs?
In most transactions, the buyer pays the bulk of the closing costs, but there are ways to reduce out-of-pocket costs if you’re buying a home.
- Down payment and closing‑cost assistance: Many states and local governments offer programs that provide grants or low‑interest loans to help qualifying buyers with down payments and/or closing costs, especially first‑time buyers; learn about several first-time home buyer programs available in Tampa.
- Seller or builder contributions: In resale transactions, sellers sometimes agree to contribute toward closing costs. In new construction, builders may offer closing‑cost promotions on select homes or during specific sales events.
At LGI Homes, that’s where buying new can provide a practical advantage:
- Builder‑paid closing‑cost promotions on select homes. When promotions are available, we may cover some or all of your closing costs on qualifying homes — savings that can add up to thousands of dollars.
- In‑house financing through our preferred lender. Our in‑house mortgage team can help you get pre‑qualified, walk you through your Loan Estimate and coordinate the steps from approval to closing, so you’re not managing multiple separate contacts during a busy time.
Together, those two pieces are designed to do what we promise across the rest of the process: help simplify the path to homeownership.
Ready to See What You’d Actually Pay at Closing?
Closing costs don’t have to be a mystery — and they don’t have to come entirely out of your pocket. We’d be happy to show you what to expect in your area, including any current closing‑cost promotions on the homes you’re considering.
Find a community near you or talk to a New Home Consultant today to get a clear picture of your closing‑day numbers.
Frequently Asked Questions About Closing Costs
Does LGI Homes pay closing costs?
Sometimes. When promotions are available, we may cover all or part of your closing costs on qualifying homes, saving you thousands of dollars. In some communities, we regularly offer builder-paid closing costs. Your New Home Consultant can explain which incentives apply to the specific home and community you’re considering.
Who pays the closing costs on a new construction home?
Homebuyers typically pay the closing costs when purchasing a new construction home. However, LGI Homes offers builder-paid closing costs on select homes in select communities, and during some promotions, this may be available nationwide. Other new home builders may also cover some or all closing costs during special promotions or on specific homes and communities. It’s always best to review the details of any incentives with your sales counselor or lender.
Are closing costs part of the down payment?
No. Closing costs are charges for services involved in originating your mortgage and transferring the home into your name. Your down payment is a separate amount that reduces the total you finance.
Can closing costs be rolled into a mortgage?
In some cases. Depending on the loan type, property and lender, you may be able to finance certain closing costs into the loan amount, or receive lender credits in exchange for a slightly higher rate. Keep in mind that rolling costs into the loan generally means paying interest on those costs over time, so it’s important to weigh the trade‑offs with your lender.
Are there homebuyer assistance programs that help with closing costs?
Yes. Many states, counties and cities offer down payment and closing‑cost assistance for qualified buyers, especially first‑time buyers. Program details vary by location, so ask your lender or New Home Consultant which programs might apply where you’re shopping.
Do I need a real estate attorney to buy a home?
It depends on your state. Some states legally require an attorney to handle the closing; many do not. Your lender, title company or New Home Consultant can confirm whether your state requires one and roughly what to expect for the fee.
Are closing costs negotiable?
Often, yes. Some fees — especially those charged directly by the lender — can vary from one lender to another. Comparing Loan Estimates from two or three lenders is one of the easiest ways to see where you might save on closing costs. In some markets, you may also be able to negotiate for seller or builder contributions.
How soon will I know my exact closing costs?
Within three business days of submitting your loan application, your lender must provide a Loan Estimate that lists your projected fees line by line.³ A few days before closing, you’ll receive a Closing Disclosure with your final, exact numbers.
[*] Closing‑cost promotions vary by community, home and current incentives. Talk to a New Home Consultant for details on what’s available where you’re shopping. Advertised promotions and rate offers are subject to change.
Sources:
https://www.census.gov/newsroom/press-releases/2026/vintage-2025-city-town-pop-estimates.html
https://www.consumerfinance.gov/ask-cfpb/what-is-a-loan-estimate-en-1995/