it all depends on what your goals are as to what you should be looking at to pay for closing costs. There are 2 sections in the closing costs that will make up your fees to close on a loan. So make sure you are comparing apples to apples if you are shopping around. You will have to pay prepaids and reserves to set up your escrow account - and those fees are going to be the same where ever you go. The prepaids and reserves is all based on your insurance premium and tax rate on the property, as well as the interest rate per diem. The prepaid interest might differ based on the rate and the day you close.

The actual closing costs are title fees and the lender fees. Title fees should all be pretty standard and show on your GFE in lines 1100 - 1120. These are controlled by the title company and are standard fees off of a fee chart. They are generally dependant on the loan amount. They differ some from title company to company. The lender fees are on your GFE in the 800 lines. The industry average for an originator is 2%. This 2% paid to the originator can be paid a few different ways. Either as an origination fee on line 801 or the bank might pay that fee to the loan officer by you taking a higher rate. See the bank pays Brokers something called Yield Spread Premium (YSP) and that is shown on GFE. It isn't a fee that costs you directly at closing, but know that the bank usually pays more YSP if you take a higher rate. Bankers get the same kind of fee, although it is called a Service Release Premium and isn't disclosed on the GFE. So again it depends on what your goals are with the loan. Sometimes it might also make sense to pay a loan discount fee to "buy down" the rate - so that on a monthly basis you are saving money. But you need to do some math on this one, cause if the loan discount fee is say 1000 and you are only saving 20 a month by buying down that rate - it will take you 50 months to recoup that cost. If you know you are not going to be living in the house for over 4 years, than it wouldn't make financial sense to pay that 1000 buy down cost.

You will also have processing fees usually around 500-700 dollars and underwriting fees of around the same amount.

Lenders make money by either charging you fees or raising your interest rate. Compare rates and fees with multiple lenders to get the best deal. http://www.moneyteachers.org/mortgage.htm