Closing costs typically run 2 to 5 percent of your loan amount and cover three distinct buckets: fees paid to your broker for originating the loan, fees paid to third parties like appraisers and title companies, and prepaid items such as property taxes and homeowners insurance that fund your escrow account. On a typical Glen Allen-area purchase, that range translates into real dollars, not just a vague percentage, and this guide breaks each piece down with current figures so you know what to expect before you write an offer.
Written by Duane Buziak, NMLS #1110647 | Coast2Coast Mortgage LLC NMLS #376205
The Three Categories Every Closing Cost Falls Into
Every fee on your closing disclosure fits into one of three buckets. The first is lender fees, sometimes called origination charges, which cover the work of underwriting and processing your loan. The second is third-party fees, paid to the appraiser, the title company, the surveyor, and the county for recording your deed. The third is prepaid items: property taxes, homeowners insurance premiums, and escrow reserves that fund the account your broker uses to pay those bills on your behalf later.
A common misconception among Henrico buyers, especially first-timers looking in Glen Allen or Twin Hickory, is that closing costs and the down payment are the same expense. They are not. The down payment is equity you’re putting into the home itself. Closing costs are separate cash needed to complete the transaction and set up your loan. Prepaids add a wrinkle: they’re not a fee paid to anyone in the sense that origination or appraisal charges are. They’re a deposit into an escrow account you effectively own, front-loading a few months of taxes and insurance so the account never runs dry.
It also helps to separate discount points from origination charges. Discount points are optional. You can pay one point, equal to 1 percent of your loan amount, to buy your interest rate down for the life of the loan. Origination charges, by contrast, are mandatory costs of processing the loan itself and aren’t tied to your rate. Confusing the two leads buyers to either overpay for points they didn’t need or assume a fee is negotiable when it’s baked into standard loan processing. Knowing which category a line item falls into is the first step to reading a Loan Estimate or Closing Disclosure without guessing.
Line-by-Line: What’s on a Henrico Closing Disclosure
Virginia’s closing disclosures follow a federal format, but a few charges are specific to the state and to Henrico County. Virginia imposes a state grantor’s tax on the seller and a local recording tax, and Henrico’s Circuit Court Clerk applies its own recording fee schedule to deeds and deeds of trust, which you can review on the Henrico County Circuit Court Clerk’s office page. Title insurance and settlement fees vary by which title company you use, and under federal rules you have the right to shop for your own title company rather than accept whoever your broker or the seller’s agent suggests.
- Origination fee: typically 0.5 to 1 percent of the loan amount, paid to your broker, often negotiable depending on the loan program and lender relationship.
- Appraisal fee: generally $500 to $700 in the Henrico market, paid to the independent appraiser, not negotiable since it reflects a third-party service.
- Credit report fee: a small flat charge, usually $25 to $75, paid to the credit reporting agency, not negotiable.
- Title insurance and settlement fee: varies by title company and loan amount, often $1,500 to $2,000 combined, and is one of the few third-party costs you can actually shop and compare.
- Recording fees and Virginia grantor’s tax: set by the Commonwealth and Henrico County, generally not negotiable, and scale with your sale price.
- Escrow prepaids: several months of property tax and insurance reserves, sized by your county tax rate and insurance premium, not a fee but a required deposit.
Some of these numbers move with your specific transaction. Your actual Loan Estimate, generated as of your application date, will reflect the fee schedule of your chosen title company and current Henrico tax rates rather than these general ranges.
Worked Example: A $425,000 Home Purchase in Glen Allen
Suppose you’re buying a $425,000 home near Wyndham or the River Road corridor with 10 percent down, giving you a loan amount of $382,500. Here’s how the categories typically stack up, using estimated figures common in the Henrico market as of 2026:
- Origination fee (about 1 percent): $3,825
- Appraisal fee: $600
- Title insurance and settlement fee: $1,800
- Recording fees and Virginia grantor’s tax: $1,300
- Prepaid escrow reserves (taxes and insurance): $2,400
Add those together and you land around $9,925, roughly 2.6 percent of the loan amount, comfortably inside the commonly cited 2 to 5 percent range. Notice that the swing factor in this example isn’t the lender’s origination fee, it’s the prepaid escrow line. A buyer closing in January, when a full year of insurance is due upfront, or one buying in a locality with a higher effective tax rate, can see that prepaid number move by a thousand dollars or more with no change to the loan itself.
Scale this same math up to a $650,000 purchase in Short Pump or Twin Hickory and the dollar figures rise, but the percentages hold roughly steady, since most of these fees are calculated as a percentage of loan amount or sale price. That’s why the 2 to 5 percent shorthand is useful for budgeting even though it obscures which specific costs are moving. Every figure here is an estimate; your actual Loan Estimate and Closing Disclosure will reflect the specific fees quoted by your title company and broker at the time you apply.
Who Pays What: Buyer, Seller, and Lender Contributions
Closing costs don’t always fall entirely on the buyer. In Henrico’s more competitive pockets, sellers along the River Road corridor or in Wyndham sometimes agree to a closing cost credit as part of contract negotiations, particularly when the market favors buyers or the home has sat for a while. Whether a seller will agree to this depends entirely on market conditions and how your offer is structured; it’s a negotiation point, not a guarantee.
Lender credits work differently. In exchange for accepting a slightly higher interest rate, your broker can apply a credit toward your closing costs. This isn’t free money. You’re trading a lower upfront cash requirement for a higher rate over the life of the loan, so it makes sense mainly if you plan to sell or refinance within a few years, or if cash on hand is the tighter constraint than long-term rate.
VA loans carry a specific advantage worth noting given Henrico’s proximity to Defense Supply Center Richmond and its concentration of military and federal households. Under current VA home loan guidelines, sellers can contribute up to 4 percent of the loan amount in concessions on top of paying all of the buyer’s allowable closing costs, which in practice can eliminate most or all of a VA buyer’s out-of-pocket cash needed at the table. That 4 percent cap applies to concessions like paying off debt or buying down points beyond the standard closing costs; it’s a separate allowance from the closing costs themselves.
Lowering Your Closing Costs Without Cutting Corners
Not every fee on a Closing Disclosure is fixed. Recording fees and Virginia’s grantor’s tax are set by statute and won’t move no matter which broker or title company you choose. But lender-controlled fees, origination charges, underwriting fees, and administrative charges, often do have room to negotiate, especially when you’re comparing offers.
One approach worth asking about directly is a no-out-of-pocket closing options structure, where your closing costs are rolled into the loan balance or offset through a rate adjustment instead of collected as cash at the settlement table. This doesn’t make the costs disappear, but it can solve a cash-flow problem for buyers who have the income to support a slightly higher payment but limited liquid savings.
Before you commit to a single Loan Estimate, start with a credit-safe mortgage pre-qualification. Because it doesn’t trigger a hard credit inquiry, you can use it to compare fee estimates from more than one source without any impact to your score, then move forward with the option that makes sense once you’re comfortable with the numbers.
Once you do receive a formal Loan Estimate, compare it line by line against any other quotes within the three-day tolerance window regulators require. Some categories, recording fees and transfer taxes among them, cannot legally change by more than a small margin between your Loan Estimate and Closing Disclosure. Others, particularly fees your broker directly controls, sometimes can, and it’s worth asking specifically which line items are negotiable before you lock in.
Henrico Closing Costs FAQ
What’s the average closing cost percentage in Virginia? Most Virginia buyers see closing costs between 2 and 5 percent of the loan amount, with the exact figure depending on your title company, loan program, and the size of your prepaid escrow deposit.
Are closing costs tax-deductible? Some closing costs, like prepaid mortgage interest and certain points, may be deductible in the year you close, while others are not; a tax professional can confirm which line items apply to your specific return.
Can I negotiate closing costs? Lender-controlled fees like origination charges are often negotiable, but government-set costs such as Henrico’s recording fees and Virginia’s grantor’s tax are fixed regardless of which broker or title company you choose.
Do I pay closing costs in cash? Typically yes, as a wire or certified funds at settlement, though buyers can sometimes reduce that cash requirement through a lender credit, a seller concession, or a no-out-of-pocket closing structure that adjusts the rate or loan balance instead.
What’s the difference between closing costs and prepaids? Closing costs are fees paid to your broker and third parties for services rendered, while prepaids are deposits into your own escrow account covering future property tax and insurance bills, not fees paid to anyone.
Does Henrico County charge extra recording fees? Henrico’s Circuit Court Clerk applies a standard Virginia recording fee schedule to deeds and deeds of trust, and the exact amount depends on your sale price and loan amount; check the clerk’s current fee schedule for precise figures.
Can closing costs be rolled into a VA loan? VA guidelines allow sellers to cover all of a buyer’s allowable closing costs plus up to 4 percent in additional concessions, which can significantly reduce or eliminate a VA buyer’s cash needed at closing.
When do I find out my exact closing costs? You’ll receive a formal Loan Estimate within three business days of applying, and a final Closing Disclosure at least three business days before settlement, both of which reflect your actual lender, title company, and locality fees rather than general estimates.
Get Your Actual Numbers Before You Make an Offer
Closing costs stop feeling like a mystery once you see them broken into categories and matched against a real price point. The next useful step is turning these estimates into your actual numbers, itemized against the home you’re actually considering in Glen Allen, Short Pump, or wherever your search takes you.
Your dream home in Henrico County is closer than you think. Discover exactly what you can afford with our credit-safe pre-qualification process that protects your score while unlocking your options. Get pre-qualified today and take the first step toward homeownership with a local mortgage expert who understands your community.