Mortgage & Home Loans

What is Closing Costs?

Closing costs are the fees you pay on closing day to finalize your mortgage. They typically run 2% to 5% of the loan amount and cover services from the lender, title company, appraiser, and government agencies.

They include lender fees (origination points, application fees), third-party fees (appraisal, title search, title insurance), government fees (transfer taxes, recording charges), and prepaid escrow deposits for insurance and property taxes.

Under CFPB rules, you get a Loan Estimate within 3 days of applying and a Closing Disclosure at least 3 days before closing—so there are no surprises about what you'll owe.

Quick Facts

Standard Cost Range2% to 5% of the mortgage amount

Regulatory DisclosuresLoan Estimate (LE) and Closing Disclosure (CD)

Timeframe RequirementClosing Disclosure received 3 days before closing

Key Buyer FeesTitle insurance, appraisal, lender origination

PRACTICAL EXAMPLE

On a $350,000 mortgage, expect to pay $7,000 to $17,500 in closing costs—on top of your down payment. That covers appraisal, title insurance, lender fees, and prepaid taxes.

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RELATED TERMS

Learn More Key Concepts

MortgageA loan secured by real estate that you pay back in regular installments over a set term.

Down PaymentThe cash you pay upfront when buying a home, which becomes your initial equity in the property.

EscrowA neutral holding account managed by a mortgage servicer to collect property taxes and homeowners insurance for annual payment.

RefinancingThe process of replacing an existing mortgage with a new one under different interest rates or terms.

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