Costs & insurance
Closing costs
Definition
Closing costs are the fees and prepaid items due when a mortgage closes, beyond the down payment: lender fees, appraisal, title insurance, recording fees, transfer taxes, prepaid interest and initial escrow deposits. For buyers they commonly total a few percent of the price, varying widely by state and loan.
Closing costs, explained
The Loan Estimate and Closing Disclosure itemise these costs.
Sellers have their own closing costs, including commissions — see seller net sheet.
See closing costs in a calculator
The Closing Cost Calculator shows how this works with real numbers. Estimate lender fees, third-party fees and prepaids — and the total cash needed to close.
Open the Closing Cost CalculatorRelated terms
- Escrow accountAn escrow account is a holding account managed by the mortgage servicer that collects part of each monthly payment to pay property taxes and homeowners insurance when they fall due.
- Seller net sheetA seller net sheet estimates the cash a seller will receive at closing: expected sale price minus the mortgage payoff, real-estate commissions, seller-paid closing costs, transfer taxes, concessions and prorated property taxes.
- Discount pointsDiscount points are upfront fees paid to a lender at closing to lower a mortgage’s interest rate.
Q.01What is closing costs?
Closing costs are the fees and prepaid items due when a mortgage closes, beyond the down payment: lender fees, appraisal, title insurance, recording fees, transfer taxes, prepaid interest and initial escrow deposits. For buyers they commonly total a few percent of the price, varying widely by state and loan.
Q.02Can closing costs be rolled into the loan?
Sometimes, depending on the program and loan-to-value, or offset by seller concessions or lender credits.
Explain it with their numbers
Calculators turn definitions into a borrower’s real payment — and a lead for you.
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