Mortgage glossary
Closing costs
Definition: Closing costs are the fees and prepaid expenses due when a mortgage closes, covering lender charges, appraisal, title insurance, recording, and upfront funding of the escrow account for taxes and insurance.
Closing costs fall into a few groups: lender fees, third party services such as appraisal, survey and title, government recording charges, and prepaids like homeowners insurance, prepaid interest and initial escrow deposits. The Loan Estimate breaks each one out.
Costs vary by loan size, loan type and property. In Texas, relatively high property taxes mean the initial escrow deposit can be a meaningful part of the total. Sellers may agree to contribute toward buyer costs within program limits, and some down payment assistance programs can help cover them.
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Reviewed by Kyle Richardson, NMLS #863464. General information, not advice for your specific situation. All glossary terms
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