One thing a lot of people forget or do not realize in the first place is that many of these "closing costs" are negotiable even in the best of times. You don't have to wait for a financial meltdown to negotiate closing costs with a lender. I hope people remember the readiness of the banks to absorb some of these costs in the future when things get better. It is all a matter of what the banks are willing to do in order to get your business, especially if they believe you are going to be a good risk and a source of future profit for them.