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What is Closing Costs

Fees incurred in addition to the purchase price of a home that will be listed on the Closing Disclosure provided to the borrower three days before closing. Closing costs cover fees associated with the sale of the home, such as title and settlement services, title insurance, appraisal, lender fees, and other services carried out during closing. Closing costs are typically 2%–5% of the home’s price. The buyer’s down payment must also be paid at closing, but is listed separately from the closing costs.

Closing cost amounts vary depending on the buyer’s loan program. The Loan Estimate provided by a lender is a fair estimate of the closing costs associated with the loan, but the final Closing Disclosure provided to the borrower three days before closing most accurately totals all the closing costs paid by both the buyer and the seller.