A detailed guide to lender charges, title and settlement fees, prepaid items, escrow deposits, and credits.
Loan costs
Closing costs are the charges and advance payments required to complete the mortgage and property transfer. They are separate from the down payment, although both contribute to cash needed at closing.
Title and settlement
Loan-related charges may include origination, underwriting, processing, appraisal, credit, flood, tax-service, and optional discount-point costs.
Prepaid items
Title and settlement charges can include title search, lender and owner title policies, escrow or attorney services, recording, transfer charges, and local requirements.
Credits
Prepaid interest, initial escrow deposits, homeowners-insurance premiums, and property-tax adjustments are not necessarily lender fees, but they can materially affect cash to close.
Cash to close
Seller credits, lender credits, earnest money, and deposits can reduce the final amount due. Always compare the Loan Estimate and Closing Disclosure rather than relying on a percentage shortcut.
Questions to ask before acting
- What assumptions could materially change the result?
- How much cash will remain after closing?
- What happens if taxes, insurance, repairs, or income change?
- Which terms should be confirmed in writing?
Bottom line
Use this guide as a framework for better questions and more complete comparisons. Actual eligibility, pricing, legal rights, and transaction requirements depend on the borrower, property, lender, program, contract, and location.