Understanding Closing Costs
What closing costs include
Costs can include lender charges, appraisal, title and settlement services, recording fees and other transaction expenses. Prepaid taxes and insurance or escrow deposits may also be collected.
The down payment is separate from transaction fees. Cash to close may reflect the down payment, deposits, seller credits, lender credits and adjustments as well as closing expenses.
Read the Loan Estimate
Compare lender charges and points using the same loan assumptions. Some services can be shopped; others are assigned or governed by local requirements. Ask which amounts can change.
A lender credit may offset upfront fees but can be associated with a higher rate. Compare the upfront benefit with interest costs over your expected holding period.
Check the final disclosure
Review the Closing Disclosure against the earlier estimate. Ask the lender or settlement professional to explain differences, due dates and final funds required.
Confirm funds-transfer details with a known contact using a verified number. Unexpected changes in wiring instructions are a warning sign. Keep copies of signed disclosures and payment records.