Wondering how much you will actually bring to the closing table in Nashville? You are not alone. Between lender fees, title charges, and prepaids, the numbers add up quickly and can be confusing the first time you see them. In this guide, you will learn what buyer closing costs include, what you can negotiate, and how your loan type changes the estimate. You will also get local tips for Davidson County and simple examples you can use right now. Let’s dive in.
What closing costs include
Closing costs are the fees, prepaids, and initial escrow deposits you pay at closing. They are separate from your down payment. Typical items include lender charges, third‑party services like appraisal and inspections, title and recording fees, prorated taxes or HOA dues, and the initial setup of your escrow account.
As a working rule, plan for about 2% to 5% of the purchase price in buyer closing costs. Your lender will give you a Loan Estimate within 3 business days of application that shows a preliminary breakdown. At least 3 business days before closing, you will receive a Closing Disclosure that lists the final numbers.
Typical totals in Nashville
Use the 2% to 5% rule to get a quick ballpark for Nashville and Davidson County. On a $400,000 purchase, that means roughly $8,000 to $20,000 in buyer closing costs before any seller credits or lender credits. Your actual number can be lower if you negotiate concessions or accept a lender credit, or higher if you choose to pay discount points or use a program with an upfront fee.
A quick calculator you can use today:
- Low estimate: purchase price × 2%
- High estimate: purchase price × 5%
For a tighter number, plug in your lender’s fees and add title, recording, insurance, taxes, and prepaid interest.
Line‑item breakdown
Loan fees
- Origination or lender charge: commonly 0.5% to 1.0% of the loan amount or a flat fee.
- Discount points: optional. Each point equals 1% of the loan to buy a lower rate.
- Underwriting and processing: often $300 to $1,000 combined.
- Credit report: typically $25 to $50.
- Rate lock or lock extension: varies by lender and timing.
Third‑party services
- Appraisal: usually $400 to $800 for a single‑family home in the Nashville area, depending on loan program and property type.
- Home inspection: buyer‑elected. General inspection often $300 to $600. Specialized inspections like termite, radon, or sewer scope are extra.
- Survey (if required): commonly $200 to $600.
- Pest or termite inspection: often $50 to $150 if required.
- Flood determination: typically $20 to $50.
Title and settlement
- Title search and exam: usually $150 to $400.
- Lender’s title insurance policy: based on the loan amount, often about 0.2% to 0.6% of the loan.
- Owner’s title insurance policy: optional but recommended, often 0.4% to 0.8% of the purchase price. Who pays is negotiable.
- Settlement or closing fee: commonly $300 to $800, varies by title company and county.
- Recording fees: county‑set fees to record the deed and deed of trust. Amount depends on the number of documents and pages.
- State or county transfer/excise taxes: treatment varies in Tennessee. Confirm current practice with the county Register of Deeds or your title company.
Prepaids and escrow deposits
- Prepaid interest: from your closing date to the first payment date.
- Homeowners insurance: often one full year paid at closing, commonly $800 to $2,000+ depending on the home and coverage.
- Property taxes: prorated between you and the seller based on the closing date. Your lender may also collect about two months of taxes for your escrow.
- Initial escrow: lenders typically collect about two months of taxes and insurance as a cushion. Requirements vary by lender and timing.
- HOA or condo dues: prorated, plus any association transfer or reserve requirements.
Program‑specific costs
- Mortgage insurance or program fees can apply based on your loan: FHA upfront mortgage insurance premium, VA funding fee, USDA guarantee fee, or conventional PMI. See loan type differences below.
What you can negotiate
Items you can influence
- Lender fees: shop two to three lenders and ask for itemized quotes. You can request fee waivers or a lender credit.
- Discount points: choose whether to pay points for a lower rate.
- Title and settlement provider: in Tennessee you can often choose the title or closing agent. Compare premiums and settlement fees. Your contract may specify a company, so check before you submit offers.
- Inspections: you decide which inspections to order and which vendors to use.
- Seller concessions: you can negotiate for the seller to pay part of your costs, subject to loan program limits.
- Lender credits: accept a slightly higher rate in exchange for the lender covering some costs.
Items usually fixed
- County recording fees and any transfer or excise taxes are set by statute or schedule.
- Title insurance premium rates often follow filed schedules. Who pays can be negotiated.
- Appraisal fees are set by the vendor, though you can sometimes shop.
- FHA, VA, and USDA program fees are set by program rules.
- Property tax prorations are mechanical based on the tax schedule and closing date.
How loan type changes costs
Conventional loans
- Closing costs are generally in the average range.
- If your down payment is under 20%, you may have monthly PMI or explore lender‑paid options with a higher rate.
- Seller concession caps vary based on down payment and occupancy. Your lender can confirm the current limits.
FHA loans
- Upfront Mortgage Insurance Premium is about 1.75% of the loan. It can often be financed into the loan.
- Ongoing annual mortgage insurance applies and is paid monthly. This affects your total monthly payment.
- Seller concessions commonly allow up to 6% of the sales price toward your costs. Confirm rules with your lender.
VA loans
- A VA funding fee applies in most cases. The percentage depends on down payment and first‑use status, and it can often be financed. Some disabled veterans are exempt.
- There is no monthly mortgage insurance, which lowers monthly cost compared to loans with PMI.
- Sellers can pay certain costs and concessions within VA program limits. A VA lender can outline what is allowed.
USDA loans
- USDA loans include an upfront guarantee fee and a small annual fee. The upfront fee can often be financed.
- Property eligibility is location‑based. Many areas in Davidson County are ineligible, while some outlying areas in surrounding counties may qualify.
- Seller concession and fee rules are program‑specific. Confirm details with your lender.
Jumbo loans
- Higher origination charges and stricter underwriting are common.
- Appraisals may be more expensive or require multiple opinions.
- Mortgage insurance and rate structures differ from conforming loans.
Local notes for Davidson County
- Recording fees and requirements are set by the county. For exact amounts and required documents, contact the Davidson County Register of Deeds or a local title company.
- Property taxes and payment schedules are administered by the county trustee and assessor. Your title company will calculate proration based on the closing date.
- Title insurance premiums in Tennessee follow filed rate schedules. A local title company can quote your exact premium based on your price and loan.
- Down payment and closing cost help may be available through the Tennessee Housing Development Agency for qualifying buyers. Metro Nashville and local nonprofits sometimes offer grants or assistance programs as well.
- New construction sometimes includes builder incentives that cover part of your closing costs when you use the builder’s preferred lender or title company.
A simple local workflow:
- Request Loan Estimates from at least two lenders.
- Ask a Nashville title company for a quote on title insurance, settlement, and recording for Davidson County.
- Add prepaids: homeowners insurance quote, property tax proration, and escrow deposits.
- Confirm any seller concessions in your contract and verify program limits with your lender.
Real‑world examples
- Scenario A: $350,000 conventional purchase with 20% down. Closing costs often land around 2% to 3% or $7,000 to $10,500. No monthly PMI.
- Scenario B: $350,000 FHA purchase with 3.5% down. Plan for 2.5% to 4.5%+ in upfront costs once you include the FHA upfront mortgage insurance premium, which may be financed.
- Scenario C: $600,000 VA purchase. Closing costs often total 2% to 4%, or $12,000 to $24,000, depending on the funding fee and any concessions. No monthly mortgage insurance.
Your numbers will vary with rate, points, insurance, taxes, and the exact mix of fees on your Loan Estimate.
Ways to lower your cash to close
- Shop lenders and compare total costs, not just rate. Ask about fee waivers.
- Negotiate seller concessions within your loan’s program limits.
- Consider a lender credit in exchange for a slightly higher rate if you need to reduce upfront cash.
- Ask about down payment or closing cost assistance through state or local programs if you qualify.
- Compare title companies for settlement and title insurance fees if your contract allows you to choose.
- Time your closing date to reduce prepaid interest if it fits your schedule.
A simple worksheet you can use
Start with the 2% low estimate and 5% high estimate. Then replace placeholders with quotes:
- Lender fees: origination, underwriting, processing, credit report.
- Appraisal and inspections.
- Title insurance premiums, title search, settlement fee.
- Recording fees and any transfer or excise taxes.
- Homeowners insurance premium, prepaid interest, initial escrow for taxes and insurance.
- HOA dues, transfer, or initiation fees if applicable.
When you enter actual quotes, you will have a near‑final cash‑to‑close estimate. Your Closing Disclosure will confirm the final numbers at least 3 business days before you sign.
Next steps
Buying in Nashville is competitive, and a clear handle on closing costs helps you move fast with confidence. If you want a second set of eyes on your Loan Estimate or need introductions to proven local lenders and title partners, reach out. Let’s review your numbers, discuss strategies to reduce cash to close, and build a plan that fits your goals.
Ready to get started? Let’s talk about your next move with Zeitlin Sotheby’s International Realty.
FAQs
What are typical buyer closing costs in Nashville?
- Most buyers should plan for about 2% to 5% of the purchase price in closing costs, separate from the down payment. Your Loan Estimate and Closing Disclosure will show itemized figures.
How do seller concessions work for buyers?
- You can negotiate for the seller to pay part of your costs, subject to loan program limits; FHA commonly allows up to 6% of the price, while VA and conventional have their own caps set by program rules and down payment.
Can I roll my closing costs into the mortgage?
- Some costs like discount points or certain program fees can be financed, while prepaids and initial escrow deposits are usually paid at closing; financing increases your loan balance and interest over time.
When will I know my final closing costs?
- Your lender must provide a Closing Disclosure at least 3 business days before closing that lists final numbers; you will receive a Loan Estimate within 3 business days of application.
How are property taxes handled at closing in Davidson County?
- Taxes are prorated between buyer and seller based on the closing date, and your lender may collect around two months of taxes for your escrow account at closing depending on timing.
Do I have to use the seller’s title company in Tennessee?
- Buyers can often choose the title or closing agent, but your purchase contract may name a provider; ask your agent before you submit an offer so you can compare title and settlement fees.
