Can I roll my closing costs into my mortgage?

On a home purchase, closing costs generally cannot simply be added to the loan amount. The exceptions are certain upfront program fees, such as FHA's upfront mortgage insurance premium or the VA funding fee, which can usually be financed. To reduce the cash you need at closing, buyers typically negotiate seller credits, accept a lender credit in exchange for a slightly higher rate, or use a closing cost assistance program.

What is the difference between earnest money and closing costs?

Earnest money is a good-faith deposit you place into escrow shortly after your offer is accepted. It is not an extra fee; it is credited toward your down payment and closing costs when escrow closes. Closing costs are the fees and prepaid items themselves. If you cancel within your contingency rights, the deposit is generally returned, but if you default after removing contingencies, you could lose it.

When do I actually pay closing costs?

Buyers send their remaining funds to escrow shortly before closing, after reviewing the final Closing Disclosure. A few items, like the home inspection and sometimes the appraisal, are paid earlier. Sellers usually do not bring money to closing, because their costs are deducted from the sale proceeds. The exception is a seller who owes more on the property than the sale will net.

Do I pay property taxes at closing?

Usually there is a proration. California property taxes are paid in two installments each fiscal year, and escrow calculates who owes what for the period up to the closing date, crediting the buyer or seller as needed. Buyers who have an impound account also fund an initial deposit so the lender can pay future tax and insurance bills on their behalf.

Are closing costs tax deductible?

Some may be. Mortgage points and property taxes you pay at closing can be deductible if you itemize, and many other purchase costs are added to your home's cost basis instead, which can reduce taxable gain when you sell. Tax rules change, so keep your final Closing Disclosure with your records and ask a tax professional how it applies to you.

Closing Costs in California: What Buyers and Sellers Pay

California closing costs explained: who pays escrow, title, transfer tax and lender fees in Riverside and San Bernardino counties, and how to lower your bill.

By Jorge ViteriREALTOR® · DRE #017397627 min readUpdated October 22, 2026Leer en español

Closing costs are the fees and prepaid expenses due when escrow closes: on top of the down payment for buyers, and on top of commissions for sellers. In Riverside and San Bernardino counties, buyers and sellers customarily split the escrow fee, sellers pay for the owner’s title insurance policy and the county transfer tax, and buyers pay their lender’s fees, the lender’s title policy and prepaid items like insurance and property taxes. Every one of these items can be negotiated in the purchase contract.

Below is who usually pays what, what each charge is for, and practical ways to lower your bill.

How much are closing costs in California?

There’s no single number, because costs depend on the price, the loan type, the lender and even the day of the month you close. As a general guide:

Buyers typically pay a few percent of the purchase price in closing costs and prepaid items. Financed purchases cost more than cash purchases because of lender fees, the lender’s title policy and impounds.
Sellers pay agent commissions, which are negotiable, plus the owner’s title policy, their share of escrow, the transfer tax and any repairs or credits they agree to.

Buyers don’t have to guess. Under federal rules, your lender must give you a Loan Estimate within three business days of receiving your loan application and a Closing Disclosure at least three business days before closing. Compare the two line by line and ask about anything that changed.

Who pays what in the Inland Empire?

This table reflects common practice in Riverside and San Bernardino counties. Your purchase contract controls, and any item can be negotiated.

Cost	Customarily paid by	Notes
Escrow fee	Split between buyer and seller	Each side also pays its own smaller escrow charges
Owner’s title insurance policy	Seller	Protects the buyer’s ownership
Lender’s title insurance policy	Buyer	Required by the buyer’s lender
County documentary transfer tax	Seller	$1.10 per $1,000 of the price in both counties as of 2026
City transfer tax	Seller, where it applies	The City of Riverside doubles the county rate
Loan fees, points, appraisal, credit report	Buyer	Itemized on the Loan Estimate
Prepaid interest, homeowners insurance, impound deposits	Buyer	Amounts depend on the closing date and loan
Property tax proration	Shared	Each side pays for the days they own the home
HOA transfer and document fees	Negotiable	Spell it out in the contract
Natural Hazard Disclosure report	Usually seller	Part of the seller’s disclosures
Home warranty	Negotiable	Often requested by buyers
Termite inspection and repairs	Negotiable	A lender may require certain repairs
Home inspection	Buyer	Usually paid at the inspection, outside escrow
Agent commissions	Negotiated	Set by the listing agreement and the buyer’s representation agreement
Existing loan payoff and liens	Seller	Paid from the sale proceeds

Transfer taxes vary by location, so escrow will calculate the exact amount for your address. Some cities in neighboring Los Angeles County, such as Pomona, add their own city transfer tax.

What do buyers pay at closing?

Lender charges

These include origination, underwriting or processing fees, optional discount points to buy down your interest rate, the appraisal and the credit report. They appear in Sections A and B of your Loan Estimate.

Title, escrow and government fees

The lender’s title policy, your share of the escrow fee, notary and recording fees fall here. Your Loan Estimate shows which services you’re allowed to shop for.

Prepaids and impounds

Prepaid interest covers the days from your closing date to the end of that month.
Homeowners insurance is usually paid for the first year at closing.
Impound (escrow) account deposits cover upcoming property tax and insurance bills if your loan has an impound account.

The supplemental property tax bill

Under Proposition 13, a purchase triggers a reassessment at the new price. The county then sends a supplemental tax bill for the difference between the old assessed value and your purchase price for the rest of the fiscal year. It often arrives months after closing and isn’t always paid from your impound account, so set money aside for it.

What do sellers pay at closing?

Agent commissions, as negotiated
The owner’s title insurance policy and the seller’s share of escrow
County transfer tax, plus city transfer tax where it applies
Payoff of your mortgage, home equity line and any liens
Prorated property taxes and HOA dues
HOA document fees, the Natural Hazard Disclosure report, and any agreed repairs, credits or home warranty

California withholding: escrow generally withholds 3⅓% of the sale price for the Franchise Tax Board unless an exemption applies, such as the sale of your principal residence. This is a prepayment of income tax, not a fee, and it’s reconciled on your tax return. Separate federal withholding rules can apply when the seller is a foreign person for tax purposes. If either could apply to you, talk with a tax professional before you list.

For the full selling picture, see our step-by-step guide to selling a house in the Inland Empire.

Mello-Roos and HOA dues: costs that continue after closing

Some costs don’t end at closing:

Mello-Roos special taxes are levied in Community Facilities Districts, which are common in newer communities in cities like Ontario and Fontana. They appear on the property tax bill. California requires sellers to make a good-faith effort to obtain the district’s Notice of Special Tax and deliver it to the buyer.
HOA dues pay for shared amenities and maintenance. Buyers should review the HOA’s budget, reserves, rules and any special assessments during the contingency period.

Both affect the monthly payment, so buyers should factor them in before making an offer.

How does Prop 19 help sellers 55 and older?

Under Proposition 19, homeowners who are at least 55 (or severely disabled, or whose home was damaged in a wildfire or natural disaster) may transfer the taxable value of their primary residence to a replacement primary residence anywhere in California, regardless of the new home’s price. Value adjustments apply if the replacement costs more. The replacement must be bought or built within two years of selling the original home, and owners who qualify by age or disability can use this up to three times. You claim it by filing with the county assessor where the new home is located.

Jorge’s tip: Get Loan Estimates from at least two or three lenders on the same day, for the same loan type and rate lock period. Then compare the origination charges and the interest rate together. A lender with lower fees but a higher rate isn’t always cheaper over the time you’ll keep the loan. Jorge knows mortgages and financing well and can help you read the estimates side by side.

How can I lower my closing costs?

Negotiate seller credits. A seller can contribute toward your closing costs. Loan programs cap how much, depending on the loan type and down payment.
Compare lenders and ask about lender credits. Some lenders will cover part of your costs in exchange for a slightly higher rate.
Look into closing cost assistance. CalHFA’s Zero Interest Program (ZIP) has offered eligible first-time buyers a deferred loan for closing costs when paired with certain CalHFA first mortgages. See our guide to first-time home buyer programs in California.
Shop the services you’re allowed to shop. Your Loan Estimate lists them.
Mind the calendar. Closing later in the month reduces the prepaid interest due at closing. It doesn’t make the loan cheaper overall, but it lowers the cash you need that day.

How do I protect my closing funds from wire fraud?

Wire fraud is a real risk in home sales. Criminals send emails that look like they’re from escrow or your agent with “updated” wiring instructions. Always call escrow at a phone number you’ve verified independently, never one from the email, to confirm the instructions before you send money. Escrow companies rarely change wiring instructions in the middle of a transaction. If you suspect fraud, call your bank right away and report it to the FBI’s Internet Crime Complaint Center (IC3).

Talk to Jorge

Jorge Viteri has worked in real estate since 2006, with deep knowledge of mortgages and financing, and he offers full service in English and Spanish. Whether you’re buying or selling, he can walk you through an estimated net sheet or a buyer’s cash-to-close before you sign anything.

Curious what your current home could net? Start with a free home value report, or contact Jorge with your questions.

This guide is general information, not legal, tax or lending advice. Customary practices, fees, tax rates and program terms change and vary by county and city; verify current figures with your escrow officer, a licensed lender and a tax professional.

Have a question?

Ask Jorge directly. He usually replies the same day.