Definition
Fees and expenses paid at the finalization of a real estate transaction, typically ranging from 2-5% of the loan amount. Common closing costs include origination fees, title insurance, appraisal fees, attorney fees, recording fees, prepaid taxes, and homeowners insurance. Buyers can sometimes negotiate for the seller to cover some closing costs.
Related Mortgage Terms
- Escrow
A neutral third-party account that holds funds during the home purchase process ...
- Origination Fee
A fee charged by the lender for processing and underwriting the mortgage, typica...
- Title Insurance
Insurance that protects against financial loss from defects in the title to a pr...
- Amortization
The process of paying off a mortgage through regular monthly payments of princip...
- Annual Percentage Rate (APR)
The total annual cost of a mortgage expressed as a percentage, including the int...
Understanding mortgage terminology helps you compare loan offers and make informed decisions. Use our mortgage calculator to see how these terms affect your monthly payment.