Every home purchase involves closing costs that are usually the responsibility of the buyer. These are expenses, above the agreed-upon sale price of the home, associated with finalizing the purchase of a house. They can include mortgage-origination fees, inspection costs, appraisal and survey fees, title search and title insurance fees, escrow deposit and attorney fees. You can pay closing costs out of pocket or choose to roll them into your mortgage amount. If you choose to incorporate closing costs into your mortgage, your monthly loan payments will be higher. Our Closing Costs and Loan-Comparison Calculator can help you understand how closing costs might affect your mortgage.
Closing Costs Calculator and Loan Comparison Definitions
Discount points — Your lender may ask you to pay points in exchange for a lower interest rate. These points are actually pre-paid interest. Instead of paying the interest over the life of the loan, points are a way to pay that amount at the inception of the loan. Points typically equal 1% of the loan amount, and they’re rolled into your closing costs.1
Origination fee — The lender charges the borrower this fee for giving you the mortgage, and it covers taking and processing the loan application, underwriting the loan and administrative tasks.2
Reconveyance fee — You’ll probably pay this fee only if you’re refinancing an existing mortgage, and only if you live in a state where reconveyance fees are allowed. This is a fee the original mortgage holder charges to close your old loan and release its claim against the property.3
Recording fee — This fee covers the costs of entering the purchase and title transfer of your home into public records.
Title insurance, title closing fee, title document prep fee and title endorsement fee — As their names suggest, all these fees are associated with ensuring the title of the home you’re buying is clear of any liens or other obstacles to transfer. Title insurance protects you if a problem with the title arises after you’ve closed on the house. The title endorsement fee pays to add protections to your title insurance post-closing. The title closing fee and title document prep fee are related to the work of researching your title to confirm it’s unencumbered.