Understanding Closing Costs

Closing costs are the fees paid at the end of the real estate transaction. They generally vary as a percentage of the total loan amount.

Common Closing Costs

• Origination Fees: The lender's fee for processing the loan.
• Appraisal Fee: Cost of having a professional evaluate the home's value.
• Title Services: Fees to check the property's legal title and provide title insurance.
• Prepaid Expenses: Property taxes and homeowner's insurance paid into an escrow account.
• Discount Points: Optional upfront fees paid to lower the interest rate.

Disclosure documents and timing depend on the jurisdiction and transaction. In the US, federal rules generally require a Loan Estimate and Closing Disclosure in covered transactions, subject to applicable timing and exceptions. Compare entered closing-cost assumptions in the Scenario Lab.