Closing costs are the expenses associated with completing a home purchase and obtaining a mortgage. They are separate from the purchase price and down payment.
Common Categories
- Mortgage origination
- Appraisal
- Credit reporting
- Title services
- Attorney or settlement services
- Recording
- Taxes
- Homeowners insurance
- Prepaid interest
- Initial escrow deposits
- Discount points, if selected
Down Payment vs. Cash to Close
A buyer’s total cash requirement may include the down payment, closing costs, prepaid items, initial escrow deposits, and adjustments, reduced by earnest money already paid and permitted seller or lender credits.
Seller Contributions
Depending on the loan program and transaction, sellers may be permitted to contribute toward eligible buyer closing costs. Program limits and documentation requirements apply.
Homebuyer takeaway: Plan around estimated cash to close, not only the down payment.