Closing Costs
Understand your closing costs before you sign
What gets paid at closing and who pays it
Costs you'll pay as the buyer
Your closing costs cover the services and protections that come with your mortgage. Loan origination fees cover the work of processing your application and preparing your loan documents. Appraisal fees pay for an independent assessment of your home's value. Title insurance protects you against claims against your property ownership. Survey fees may apply if the lender requires a property boundary verification. Inspection and attorney fees are often included depending on your state and loan program. Homeowners insurance and property taxes may be due at closing. These costs vary based on your loan amount, location, and the specific services required for your transaction.
Costs the seller typically covers
Sellers usually pay the real estate agent commissions, which are typically a percentage of the sale price. Title insurance for the buyer is often the seller's responsibility. Transfer taxes and recording fees vary by state and county. The seller may pay for repairs required by the lender's appraisal or inspection. Prorated property taxes and homeowners association fees are adjusted between buyer and seller at closing. Some sellers pay for the buyer's title insurance or closing attorney fees as part of the negotiated sale terms. Specific seller obligations depend on local custom and what the purchase agreement specifies.
Fees paid to service providers
The appraisal is ordered by the lender and paid by you. Title search and insurance come from title companies that verify property ownership. Recording fees go to the county or local government to officially record the deed and mortgage. Homeowners insurance is purchased from your chosen insurer. Property taxes are collected by your local government. Credit reports are obtained by the lender to verify your creditworthiness. These fees are necessary steps in the mortgage process and protect both you and the lender throughout the transaction.
Calculate what you'll owe at closing
Your closing costs depend on the loan amount, property location, and services required. Use this calculator to get an estimate of what to expect. Your actual closing costs will be detailed in your Closing Disclosure, which you'll receive at least three business days before closing.
Calculator results are estimates provided for illustrative purposes only and may not reflect actual loan terms. This is not a commitment to lend, a preapproval, or an offer of credit. Actual rates, payments, and costs depend on credit approval, satisfactory appraisal, and underwriting guidelines. Consult a licensed loan officer for details.
Common questions about closing costs
Closing costs are fees and expenses you pay to finalize your mortgage. They typically range from one to five percent of your loan amount. Understanding each cost helps you prepare for your actual closing day.
Can I negotiate my closing costs?
Yes. You can negotiate with the seller to cover some of your costs as part of the purchase agreement. You can also shop around for services like title insurance and homeowners insurance. The lender's fees are typically set, but it's worth asking about available options. Some closing costs are required by law or regulation and cannot be reduced. Your real estate agent can advise on what's customary to negotiate in your area.
When do I pay my closing costs?
You'll pay your closing costs at the closing meeting, which happens after your loan is approved and all inspections and appraisals are complete. You'll receive a Closing Disclosure at least three business days before closing that itemizes every cost. Payment is typically made by wire transfer or cashier's check directly to the closing agent. Your closing agent will coordinate the timing and method of payment with you before the closing date.
What's included in closing costs?
Closing costs include loan origination fees, appraisal fees, title search and insurance, survey fees, credit report fees, recording fees, property taxes, homeowners insurance, and attorney fees if applicable. Some costs are paid directly to third parties like the appraiser or title company. Others go to your lender or closing agent. Your specific closing costs depend on your loan program, property location, and any negotiated terms in your purchase agreement.
The Closing Day
What happens at your closing appointment
Closing is the final step where you sign all the loan documents and transfer ownership of the property. You'll meet with a closing agent, who may be an attorney, title company representative, or escrow officer. They'll guide you through each document and explain what you're signing. The closing agent ensures all documents are complete and accurate before you sign. You'll sign the promissory note, which is your promise to repay the loan. You'll sign the mortgage or deed of trust, which gives the lender a claim on the property if you don't pay. You'll review and sign the Closing Disclosure, which summarizes all the loan terms and closing costs. After signing, funds are wired from the lender and your down payment is transferred. The title company records the deed and mortgage with the local government. Once everything is recorded, you receive the keys and the property is yours.