Guide · Costs · 2 min read
What Closing Costs Cover
What the cash due at the end of the loan is usually for, without a sample fee sheet.
Cash to Close Is More Than One Number
costs are the fees and prepayments due when the loan is finished. They are not the down payment, though people sometimes add the two numbers together when they talk about cash to close.
People often say "closing costs" when they mean every dollar due on closing day. That pile usually has three parts. The cards below keep them separate.
01
Equity
Down Payment
The down payment is your share of the home. It is not a fee. People sometimes fold it into the fees when they talk about the cash they need to bring.
02
Fees
Work on the File
These pay for work. An appraisal, a credit report, a title search, an attorney or an escrow company, and recording the deed with the county.
03
Prepayments
Bills Paid Ahead
Early deposits for property taxes and homeowners insurance often go into escrow. They are your bills, collected before the first monthly payment.
What the Fees Usually Cover
Common pieces include the , title work, and early deposits for taxes and insurance that go into . A lender may also charge . Ask for each item in dollars before you compare one loan with another.
01
A professional opinion of what the home is worth. The lender uses it to see whether the price and the loan fit the property.
02
A title company checks who owns the home and whether old claims are attached to it. Escrow holds the money and the papers until the sale is finished.
03
Lender Charges
Fees the lender charges to make the loan. Ask for each one in dollars before you compare one loan with another.
04
A fee you can choose to pay to change the rate. One point is one percent of the loan amount. Paying points is a choice to compare, not a requirement on every loan.
05
Prepaid Taxes
Often the first months of property tax, set aside so the bill can be paid when it comes due. The amount on your file is the one that counts.
06
Prepaid Insurance
Often the first year of homeowners insurance, plus a cushion held for later bills. Homeowners insurance covers the house. It is separate from mortgage insurance.
Two Papers to Read
The list that applies to you is on your disclosure. Ask what each fee is for, and which fees can still change.
Early
Loan Estimate
You receive a Loan Estimate early in the file. It lists the costs the lender expects. Use it to ask what each fee is for, and which fees can still change.
Before You Sign
Closing Disclosure
The Closing Disclosure arrives before you sign. Read it line by line. Compare it with the Loan Estimate, and ask about any fee that grew.
Purchase or Refinance
The cash can be arranged in more than one way. Neither way removes the costs.
On a Purchase
A seller can sometimes pay part of your costs. The contract has to say so, and the loan program has to allow it. That help is not automatic.
See Buying a Home
On a Refinance
A refinance has closing costs too. You can pay them in cash or, when the value allows it, add them to the loan. Adding them means you borrow them. A lower payment has to cover those costs before it helps. If you expect to move before then, the savings may not show up.
Open the Refinance Calculator
Replace Any Line With a Real Figure
Any figure in the closing-cost calculator is an illustration based on numbers you enter or numbers labeled as a starting sketch. Replace a line when someone gives you a real figure. It is not a closing disclosure or a loan offer.
A Real Conversation
Ready When You Are.
Talk with a loan officer who is licensed where the home is. Walk through buying, refinancing, or a loan that does not fit a standard file. Start with the directory, or answer a few questions first.