Average closing costs in Minnesota

Buying a home involves several upfront expenses, and understanding closing costs is an important part of planning your budget. These fees help cover the services and documentation needed to complete your purchase. In Minnesota, both buyers and sellers are responsible for different portions of the closing costs, and the total amount varies depending on the home, loan, and location. Knowing what to expect can help make closing day feel much more manageable.

Key takeaways:

• Closing costs in Minnesota average about 3.55% of the home’s purchase price for buyers.
• Buyers commonly pay for loan origination fees, home inspections, appraisals, and title insurance.
• Seller expenses typically include real estate agent commissions (which are fully negotiable), prorated taxes, title fees, and deed preparation.
• Various fees — including lender charges, title work, and some third-party services — may be compared or negotiated to help reduce your total closing costs.

How much are closing costs in Minnesota?

With a median home sale price of $355,600, buyers in Minnesota typically pay about $12,802 in closing costs — roughly 3.55% of the home’s purchase price. These totals include lender charges, appraisal and inspection fees, title services, escrow expenses, and taxes required to finalize the transaction.

Closing costs can also shift depending on where in Minnesota the home is located. Buyers in Minneapolis, St. Paul, and Rochester may experience different totals due to variations in service provider pricing, local taxes, and insurance costs. Factoring in these differences can help buyers plan more accurately.

What affects closing costs in Minnesota?

• Property location: Recording fees and local tax rates differ between cities and counties.
• Home price: Percentage-based fees rise with higher purchase prices. Learn more about home value.
• Loan type and down payment: FHA, VA, USDA, and conventional loans vary in required fees.
• Title and escrow fees: Influenced by property history and service provider.
• Taxes and recording fees: Vary by county.
• Insurance and prepaid items: Homeowners insurance, prepaid interest, and tax escrows affect your total cash to close.

Are closing costs in Minnesota above average?

Nationally, closing costs typically range from about 0.4% to 3% of a home’s purchase price. Based on the Lodestar’s average national sales price of $438,236, typical national closing costs can fall between roughly $1,750 and $13,150. Minnesota’s average buyer closing cost is $12,802, or 3.55%. Minnesota aligns closely with its Midwestern neighbors. Wisconsin’s average closing costs are about 3.26%, and Iowa’s average sits near 4.15%, with variations generally driven by local taxes, title fees, and insurance pricing across counties.

Overall, Minnesota’s closing costs are typical for the Midwest and align closely with national averages. To see how these expenses fit into the full closing process, review this overview of closing on a house and how transfer taxes may impact your final amount.

What do Minnesota’s closing costs include?

Closing costs in Minnesota consist of the lender, inspection, title, and administrative fees required to complete a home purchase. Some costs are tied to your mortgage, while others reflect the property’s condition, insurance needs, and local recording requirements. Knowing what these fees cover can help buyers better prepare for closing day.

• Lender-related fees: Application, origination, and credit check fees; certain loans may also include rate-lock charges outlined in mortgage rate lock guides.
• Appraisal fees: Required to confirm the home’s market value, following standard home appraisal practices.
• Home and pest inspection fees: Covers structural, mechanical, and pest inspections, much like those in a typical home inspection checklist.
• Title search and insurance: Protects the buyer and lender from ownership disputes, as described in title insurance resources.
• Survey fees: Confirms boundaries and easements when needed.
• Courier fees: Covers the delivery and processing of key documents.
• Recording fees: Collected by counties to officially record property transfers.
• Notary fees: Ensures proper authentication of required signatures.
• Prepaid items: Includes upfront payments for taxes, insurance, prepaid interest, and homeowners association dues.
• Private mortgage insurance (PMI): Required when the down payment is under 20%.
• Attorney fees: Charged when legal support is requested or required.
• Rate-lock fees: May apply when securing an interest rate early.
• Mortgage discount points: Optional upfront payments that reduce the mortgage rate, consistent with standard mortgage points practices.

Together, these fees ensure the transaction is properly documented, insured, and complete. Your Loan Estimate and Closing Disclosure break down each cost so you know what to expect.

Who pays closing costs in Minnesota?

In Minnesota, both buyers and sellers share responsibility for closing costs. While many fees are standard for each side, some items can be negotiated depending on the agreement and the competitiveness of the offer.

Closing costs for buyers

Buyers usually pay lender- and property-related fees. These costs cover the home’s valuation, inspections, insurance, and loan processing. Common buyer closing costs include:

• Loan application and origination fees
• Home appraisal and inspection
• Title search and lender’s title insurance
• Prepaid expenses
• Recording and notary fees
• Attorney fees (if used)
• Mortgage discount points

Several buyer fees—especially lender charges, inspection choices, and discount points—can be negotiated or vary by provider. More guidance is available in first-time home buyer expenses to save for.

Closing costs for sellers

Sellers in Minnesota also have expenses, including several that overlap with buyer fees. Agent commissions make up most of the seller’s cost, though prorated taxes, recording fees, and payoff charges are also common. Common seller closing costs include:

• Real estate agent commissions
• Owner’s title insurance and other title-related fees
• Prorated property taxes and HOA dues
• Deed preparation and recording fees
• Attorney fees (if used)
• Outstanding mortgages and liens
• Seller concessions (if negotiated)

How to reduce your closing costs in Minnesota

Certain closing costs in Minnesota — such as title insurance, recording fees, property taxes, and prepaid interest — are fixed, but many others are not. With preparation and comparison shopping, buyers can often reduce the amount they need to bring to the closing table.

• Research home buyer assistance programs: In Minnesota, state-wide support through Minnesota Housing’s Start Up or Step Up loans (including Deferred Payment and Monthly Payment loans) can offer up to $18,000 toward down payment or closing costs. For local support, consider county or nonprofit-based programs such as Hennepin County Homebuyer Assistance, NeighborWorks Home Partners, or the Three Rivers Community Action Gap Financing — all of which help eligible buyers reduce up-front costs. Many offer grants or low-interest loans that can be applied toward down payments or closing fees. Much of Minnesota also qualifies for USDA rural loans, which can lower total cash needed at closing.
• Shop around for a lender: Lender fees differ from one provider to another. Comparing loan estimates can help buyers find more affordable origination charges or reduced processing fees. This guide to choosing a mortgage lender outlines what to look for.
• Negotiate seller concessions: Depending on market conditions, sellers may agree to contribute to your closing costs through concessions. A helpful explanation is available in this overview of seller concessions.
• Consider a no-closing-cost mortgage: These mortgage options shift upfront fees into the loan or interest rate, reducing the amount due at closing. More detail is available here: no-closing-cost mortgage.

Even when some fees cannot be changed, understanding which closing costs are negotiable can help buyers make decisions that keep expenses manageable.

FAQ on closing costs in Minnesota

Does Minnesota require paying for a real estate attorney?

No, Minnesota does not require attorney involvement during a home purchase, though buyers or sellers may still hire one for peace of mind. Title companies and settlement agents typically handle documentation and closing procedures. More context is available in this overview of real estate attorneys.

When do Minnesota buyers find out their closing costs?

Buyers receive their initial Loan Estimate within three business days of submitting a mortgage application. This document outlines projected fees. A final Closing Disclosure arrives at least three days before closing with exact costs. Reviewing both documents helps ensure accuracy. Learn more about the Loan Estimate and the Closing Disclosure.

When and how will I pay my Minnesota closing costs?

Closing costs are typically due on closing day when the property officially changes hands. Payments are usually made via wire transfer or cashier’s check to the settlement company or title office. The Closing Disclosure provides exact instructions ahead of time. More information is available in this overview of time to close on a house.

How can I save up for Minnesota’s closing costs?

Closing costs in Minnesota average about 3.55% of the home’s purchase price. Savings strategies may include monthly contributions, setting aside bonuses, or using tax refunds. Programs such as Minnesota Housing Start Up / Step Up, Deferred Payment Loans, or local support through NeighborWorks Home Partners can also help reduce upfront expenses. Additional savings tips appear in this guide on how to save for a house.

Are Minnesota’s closing costs deductible on my taxes?

Most closing costs—including appraisal fees, title insurance, and recording charges—aren’t deductible. However, prepaid mortgage interest and property taxes may qualify for deductions in the year of purchase. Homeowners who itemize may also claim ongoing tax benefits tied to interest and property taxes. More details are available in guides on tax-deductible closing costs and homeowner tax deductions, as well as IRS Publication 530.

The bottom line: Prepare your finances for Minnesota closing costs

Minnesota closing costs generally average around 3.55% of the home’s purchase price and include lender fees, inspections, title work, taxes, insurance, and recording charges. Both buyers and sellers share these expenses, though totals can shift based on the property, loan type, and any negotiated concessions. Understanding which costs apply to you—and exploring opportunities to reduce them—can help you move into the process with clarity and confidence. If you’re ready to buy a home in Minnesota, getting preapproved is an important first step toward planning for these expenses.