Closing Costs

Closing costs are the collection of fees paid to finalize a real-estate loan — typically 2–6% of the loan amount, due at signing. On a $300,000 mortgage that’s $6,000–18,000, a sum large enough to deserve its own line in any buying or refinancing decision.

What’s inside the number: lender charges (origination fee, points, underwriting), third-party services (appraisal, title search and insurance, credit report, survey), government items (recording fees, transfer taxes), and prepaid amounts that aren’t really fees at all — the first year’s insurance and initial escrow deposits.

The costs split into negotiable and not. Lender fees vary meaningfully between institutions — which is why collecting Loan Estimates from 2–3 lenders on the same day routinely saves four figures. Title services can often be shopped. Taxes and recording fees cannot.

Points deserve special attention: an optional closing cost where 1% of the loan buys a rate reduction (commonly ~0.25%). Points are prepaid interest — worth it only if you keep the loan long enough for the monthly savings to repay the upfront cost, the same break-even logic as a refinance.

By law you receive a standardized Loan Estimate within three business days of applying — the document that makes offers comparable. Use it.