What are closing costs?

Closing costs are the fees and charges you pay at settlement to complete the loan and the real estate transaction. They can include lender fees (origination, underwriting), third-party services (appraisal, title), and prepaid items (e.g. prepaid interest, insurance).

Lender fees often vary the most between lenders. The Loan Estimate groups costs into sections; Section A (origination charges) is typically lender-specific. Other sections cover services you can shop for and services the lender selects.

Closing costs are often 2–5% of the loan amount, but the total depends on the lender, loan type, and location. When comparing quotes, look at both the interest rate and total closing costs to see the full picture.

You can compare closing costs across lenders by entering each quote’s numbers—including closing costs and lender credits—into a comparison view. That way you see how much you’ll pay at closing and over time.