What Are Closing Costs?

The main categories

Closing costs fall into four buckets.

• Lender fees: origination, underwriting, discount points, credit report
• Third-party services: appraisal, inspection, survey, title search
• Title and settlement: lender's and owner's title insurance, escrow or attorney fees
• Government and prepaids: transfer and recording taxes, prepaid interest, initial property tax and insurance escrow

What you can influence

Lender fees and title providers are often shoppable — your Loan Estimate labels which services you may shop for. Seller credits toward closing costs are negotiable in many markets. Government transfer taxes generally are not.

Documents that govern the numbers

The Loan Estimate arrives within three business days of application; the Closing Disclosure arrives at least three business days before closing. Compare them line by line — certain fees are legally restricted from increasing between the two.

Keep reading

• How Much Money Do I Need to Buy a Home?

  Cash to close, reserves, and the costs that arrive right after closing.

• What Is Property Tax?

  How property tax is assessed, escrowed, and how it changes over time.