Understanding Closing Costs

Closing costs are the fees and prepaid amounts due when your purchase or refinance is finalized. They are separate from your down payment.

What is usually included

• Lender fees, Origination, underwriting and any points you choose to buy to lower your rate.
• Third-party services, Appraisal, credit report, survey, and home inspection if not paid earlier.
• Title and settlement, Title search, title insurance and the settlement or escrow fee.
• Government charges, Recording fees and, in many places, transfer taxes.
• Prepaids and escrow, Homeowners insurance, property taxes and prepaid interest collected upfront.

How to plan for them

1. 1Read your Loan Estimate, Lenders must give you one shortly after you apply. It lists expected costs line by line.
2. 2Compare offers, Ask more than one lender for an estimate so you can compare fees, not just rates.
3. 3Ask about credits, Seller concessions, lender credits and agent rebates can reduce the cash you need at closing, depending on your loan and state rules.
4. 4Check the Closing Disclosure, You should receive it a few days before closing. Compare it with your Loan Estimate and ask about any changes.