Closing costs
The upfront fees you pay at the end of a real estate transaction — typically 2–5% of the loan amount.
Closing costs include lender fees (origination, underwriting, points), third-party fees (appraisal, title insurance, survey, credit report, attorney), and government/prepaid items (recording fees, transfer tax, prepaid property tax and homeowners insurance). On a $400,000 mortgage that's $8,000–$20,000. Lenders are required to give you a Loan Estimate within 3 business days of your application that itemizes every line, and a Closing Disclosure 3 business days before closing — anything that changes by more than the legal tolerance triggers a re-disclosure period.
Related
- Discount points — Paying upfront cash to lower your interest rate.
- APR (Annual Percentage Rate) — The true yearly cost of borrowing — interest plus most fees.
- Refinance — Replacing your existing mortgage with a new one — usually for a lower rate or different term.