Everyone budgets for the down payment. The bill that actually surprises Phoenix buyers is everything else on the settlement statement. Here's what those line items are, what they typically run in Arizona, and which ones you can negotiate away.
The short version
On top of your down payment, plan for roughly 2–3% of the purchase price in closing costs and prepaids on a typical Phoenix-metro purchase. On a $450,000 home that's about $9,000–$13,500. Seller concessions and lender credits can cover much of it — more on that below.
What's actually in that number
Lender and third-party fees
- Loan costs: underwriting/processing fees or points, which vary by lender and rate choice. This is where shopping 160+ wholesale lenders shows up in real dollars.
- Appraisal: typically $550–$800 in the Valley, more for large or unusual properties.
- Credit report, flood cert, verification fees: small, fixed, unavoidable.
Title and escrow
- Arizona closes through title/escrow companies, not attorneys. Escrow fees are customarily split between buyer and seller.
- By Valley custom the seller pays for the owner's title policy; the buyer pays the lender's policy, which is the smaller of the two.
- Recording: Arizona counties charge a flat recording fee (around $30 per document in Maricopa County), and Arizona has no real estate transfer tax — a genuine advantage over many states.
Prepaids and escrows — the part people forget
- Homeowners insurance: the first year's premium is paid at closing, plus a couple months of reserves for your escrow account. Insurance pricing moved a lot in recent years — quote early.
- Property taxes: Arizona taxes are paid in arrears in two halves (due October and March), so what you owe at closing depends on the closing date. The proration is calculated to the day on your settlement statement.
- Prepaid interest: interest from your closing date to month-end. Closing late in the month shrinks this line.
Who can pay these for you
Seller concessions are negotiated credits from the seller toward your costs — allowed up to 3% on conventional (with less than 10% down), 6% on FHA, and 4% on VA. I keep a full seller concession limits table current by loan type. Lender credits trade a slightly higher rate for cash toward your costs, which can make sense when cash-to-close is the binding constraint. And several Arizona DPA programs allow their funds to go toward closing costs, not just the down payment.
A realistic example
FHA purchase at $450,000 in Mesa: 3.5% down is $15,750. Closing costs and prepaids around $11,000. If we negotiate a 2% seller concession ($9,000), your cash to close lands near $17,750 all-in rather than $26,750. That negotiation is worth more than most rate differences people obsess over — and it's why your lender and your agent should be talking strategy before you write the offer, not after.
How to keep the number down
- Have your agent ask for concessions where the market allows it — in a balanced market, sellers deal.
- Compare loan estimates properly: same rate, same day, side by side. I do this across lenders as the default.
- Time your closing date with the tax calendar and month-end in mind.
- Get two insurance quotes, not one. The spread can be hundreds a year.
Related reading
- The Phoenix First-Time Homebuyer Guide
- Seller Concession Limits by Loan Type
- Arizona Down Payment Assistance in 2026
Ranges reflect typical Phoenix-metro transactions as of August 2026 and are illustrative, not a Loan Estimate or a commitment to lend. Your figures depend on price, program, rate choice, insurance, and closing date. Concession limits per Fannie Mae, HUD, and VA guidelines.