Understanding Closing Costs
Where does your money go at closing? Your down payment isn't the only money you may need to bring to closing. Closing costs can include several different expenses associated with obtaining and closing your mortgage.
Common costs may include:
- Title fees — Services related to the title search, title insurance, and closing.
- Lender fees — Charges associated with processing and originating the mortgage.
- Appraisal — An independent valuation of the property for lending purposes.
- Escrow deposits — Funds collected for future property taxes and homeowners' insurance.
- Prepaid interest — Interest covering the period between closing and your first mortgage payment.
- Other third-party services — Depending on the transaction, this may include inspections, surveys, recording fees, and other services.
Why Does It Matter?
Closing costs can vary significantly depending on the property, loan program, lender, location, and transaction structure.
Don't just look at the interest rate. Review your Loan Estimate and understand where your closing dollars are going.
This information is provided for general educational purposes only and is not a commitment to lend, an offer of credit, or individualized financial advice. Loan programs, eligibility requirements, interest rates, terms, fees, mortgage insurance, and guidelines are subject to change and may vary by borrower, property, lender, and loan program. All loans are subject to applicable underwriting, credit, income, asset, and property requirements.