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conventional Closing Costs
Explained

conventional loans have low down payment options, but there are still closing costs. The good news: conventional protects you from many fees other borrowers pay, and strategies exist to close with $0 out of pocket.

COST BREAKDOWN

Typical conventional Closing Costs on a $400K Home

Item
Amount
Can Finance?
conventional Closing Costs
2.15% first use, 5-20% down
$8,600
Yes
Title Insurance & Escrow
Varies by state
$2,200
No
conventional Appraisal
Required by conventional
$600
No
Recording Fees
County recording
$150
No
Prepaid Interest
Closing to month end
$1,000
No
Homeowners Insurance
First year prepaid
$1,400
No
Total Estimated Closing Costs
$13,950
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$0 STRATEGY

How to Close with $0 Out of Pocket

Seller Credits

conventional allows sellers to contribute up to 4% of the purchase price toward your closing costs. On a $400K home, that is $16,000 — more than enough to cover everything.

Lender Credits

Accept a slightly higher interest rate (e.g., 5.875% instead of 5.750%) and the lender provides a credit toward your closing costs. Can cover $3,000-8,000+ depending on loan size.

Finance the Closing Costs

The conventional closing costs ($8,600) can be rolled into your loan balance. This removes the largest closing cost from your pocket. Combined with seller credits, you can close with truly $0.

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conventional PROTECTS YOU

Fees conventional Borrowers Do NOT Pay

The conventional prohibits lenders from charging these fees to conventional borrowers. This is one of the strongest borrower protections in the mortgage industry.

No prepayment penalty — pay off early anytime
No broker commission charged to borrower
No attorney fee (in most states)
No HUD/FHA inspection fee
No mortgage insurance — ever
No excessive origination charges
No real estate commission charged to buyer
No notary fee (in most cases)

Compare with Conventional closing costs and conventional closing costs to see the difference.

FAQ

Closing Cost Questions

conventional closing costs typically range from 2-5% of the home price. On a $400,000 purchase, expect $8,000-$14,000 in total closing costs. The largest item is usually the conventional closing costs (2.15% first use). However, with seller credits and lender credits, many conventional buyers close with very little or $0 out of pocket.
Yes. conventional allows sellers to pay up to 4% of the purchase price toward your closing costs. On a $400K home, that is $16,000 — more than enough to cover all typical closing costs. This is negotiated as part of your purchase offer. Many sellers agree to this, especially in balanced markets.
The conventional closing costs is the largest closing cost for most conventional borrowers at 2.15% first use ($8,600 on $400K). However, it can be financed into your loan so you do not pay it out of pocket. Starting in 2026, the closing costs is also tax-deductible. Homebuyers with 10%+ conventional disability rating are completely exempt.
You can finance the conventional closing costs into your loan. Other closing costs cannot be added to the loan balance, but they can be covered by seller credits, lender credits, or gift funds. With the right strategy, you can close a conventional purchase with $0 out of pocket.
conventional closing costs are generally lower because conventional prohibits many fees that conventional and conventional borrowers pay (like mortgage insurance, prepayment penalties, and certain lender fees). The conventional closing costs is the main cost, but it replaces the PMI that conventional and conventional charge monthly. Over time, conventional is significantly cheaper.
RELATED

Related Resources

conventional Closing Costs DetailsConventional Purchase ProcessPayment CalculatorConventional Loan LimitsFirst-Time Buyer Guide
EXPLORE

Related Resources

Closing CostsConventional PurchasePayment CalculatorConventional Loan GuideLoan Limits
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REVIEWS

What conventional Buyers Say

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"5-20% down, no PMI at 20%+ down, lowest rate I found. Valley West closed my conventional loan in 24 days."

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"Third conventional purchase with Valley West. They shop 50+ lenders every time. Always the best deal."

— conventional buyer, Henderson
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"Saved $66K over conventional. Zero fees, zero hassle. Valley West knows conventional loans."

— conventional buyer, North Las Vegas
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Conventional Loan Resources

→ Conventional Eligibility → Conventional Rates Today → conventional Calculator → Conventional Purchase → conventional Refinance → conventional Guide → First-Time Buyer → Closing Costs → Closing Costs → conventional vs FHA
FAQ

Frequently Asked Questions

conventional loan closing costs include the conventional closing costs (1.25-3.3%), appraisal fee ($500-800), title insurance, recording fees, survey fee, and credit report fee. Valley West Mortgage charges zero origination or processing fees. Total closing costs typically range from 2-5% of the loan amount.

Yes. On a conventional loan, the seller can pay up to 4% of the purchase price toward the buyer's closing costs and concessions. This includes discount points, prepaid taxes and insurance, and the conventional closing costs. This is one of the most generous seller concession limits among all loan types.

The conventional closing costs is a one-time payment to the conventional that funds the loan guarantee program. For first-time use with 5-20% down, the fee is 2.15% of the loan amount. The fee decreases with larger down payments and increases for subsequent conventional loan use.

Yes. The conventional prohibits lenders from charging homebuyers for attorney fees, real estate agent commissions, brokerage fees, or prepayment penalties. These are known as non-allowable fees. Valley West Mortgage also waives all origination and processing fees.

The conventional closing costs can be financed into the loan amount. Other closing costs generally cannot be rolled into a conventional purchase loan, but the seller can pay them. On a conventional refinance (rate-and-term refinance), most closing costs can be included in the new loan balance.

conventional rates from 5.750%
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