What we verified in “Closing costs explained: what you pay and what can change”

Statements and where we checked them

The statements with rules, figures or dates, with the exact place in the source and the date we checked them.

1. According to the CFPB, closing costs, also called 'settlement costs', are the upfront costs you are charged to get your loan and transfer ownership of the property, and they are part of what you pay at closing; the estimated cash to close includes your down payment and closing costs, minus any deposit you already paid to the seller, any amount the seller agreed to pay toward your closing costs (seller credits) and other adjustments; it is usually paid by cashier's check or wire transfer, and you will need to give the lender proof of the source of these funds.

   Sources 2 · Loan Estimate Explainer (page last modified Oct. 29, 2025), 'What are your estimated closing costs?': 'the upfront costs you will be charged to get your loan and transfer ownership of the property'; 'Is the Estimated Cash to Close what you were expecting?': 'includes your down payment and closing costs, minus any deposit you have already paid to the seller, any amount the seller has agreed to pay toward your closing costs (seller credits), and other adjustments'; 'This payment is usually made by cashier’s check or wire transfer'; 'proof of the source of these funds' · Checked October 17, 2026

2. According to the CFPB, when you buy a home you generally pay all of the costs of that transaction, although depending on the contract or state law the seller may end up paying some; you can negotiate a seller credit toward your closing costs, but the seller will usually require a higher price to cover it, so you still pay those costs through your loan; a lender credit is not free either: the lender typically increases your loan amount or charges a higher interest rate; common charges include appraisal fees, tax service provider fees, title insurance, government taxes and prepaid expenses such as property taxes, homeowners insurance and interest until your first payment is due.

   Sources 3 · What fees or charges are paid when closing on a mortgage and who pays them? (last reviewed Sep 11, 2024): 'you generally pay all of the costs associated with that transaction'; 'depending on the contract or state law, the seller may end up paying for some of these costs'; 'the seller will usually require you to pay a higher price for the home in order to cover the costs of this credit'; 'This credit isn’t free either'; 'increase your loan amount to cover these costs, or charge you a higher interest rate'; 'Appraisal fees'; 'Tax service provider fees'; 'Title insurance'; 'Government taxes'; 'Prepaid expenses such as property taxes, homeowners insurance, and interest until your first payment is due' · Checked October 17, 2026

3. Under Regulation Z, the Loan Estimate shows under 'Closing Cost Details' a 'Loan Costs' table with 'Origination Charges' (what you pay the creditor and loan originator for originating and extending the credit, including points paid to reduce the interest rate), 'Services You Cannot Shop For', 'Services You Can Shop For' and 'Total Loan Costs'; and an 'Other Costs' table with 'Taxes and Other Government Fees' (recording fees and other government fees and taxes, and transfer taxes paid by the consumer), 'Prepaids' (homeowner's insurance premium, mortgage insurance premium, prepaid interest and property taxes paid in advance of the first scheduled payment), 'Initial Escrow Payment at Closing', 'Other' (where optional products are labeled '(optional)') and 'Total Closing Costs', which adds 'D + I' and subtracts lender credits.

   Sources 4 · 12 CFR §1026.37(f)(1)–(4) ('for originating and extending the credit'; 'The points paid to the creditor to reduce the interest rate'; 'Services You Cannot Shop For'; 'Services You Can Shop For'), (g)(1)–(4) ('Recording Fees and Other Taxes'; 'Transfer Taxes'; 'in advance of the first scheduled payment'; 'Initial Escrow Payment at Closing'; '(optional)') and (g)(6) ('D + I'; 'Lender Credits') · Checked October 17, 2026

4. In the CFPB's sample Loan Estimate, page 2 labels the blocks with letters: A. Origination Charges; B. Services You Cannot Shop For (with charges such as the appraisal fee and credit report fee); C. Services You Can Shop For (with charges such as a pest inspection, a survey and title services); D. Total Loan Costs (A + B + C); E. Taxes and Other Government Fees; F. Prepaids; G. Initial Escrow Payment at Closing; H. Other; I. Total Other Costs (E + F + G + H); and J. Total Closing Costs.

   Sources 5 · Sample Loan Estimate (adjustable-rate loan), page 2: 'A. Origination Charges'; 'B. Services You Cannot Shop For' ('Appraisal Fee', 'Credit Report Fee'); 'C. Services You Can Shop For' ('Pest Inspection Fee', 'Survey Fee', 'Title – Lender’s Title Policy'); 'D. TOTAL LOAN COSTS (A + B + C)'; 'E. Taxes and Other Government Fees'; 'F. Prepaids'; 'G. Initial Escrow Payment at Closing'; 'H. Other'; 'I. TOTAL OTHER COSTS (E + F + G + H)'; 'J. TOTAL CLOSING COSTS' · Checked October 17, 2026

5. According to the CFPB, a Loan Estimate is a three-page form you receive after applying for a mortgage; the lender must provide it within three business days of receiving your application; all lenders must use the same standard form, which makes it easier to compare; when you receive it, the lender has not yet approved or denied your application; and you do not receive a Loan Estimate or Closing Disclosure for a reverse mortgage, a home equity line of credit (HELOC), a manufactured housing or mobile home loan not secured by real estate, or a subordinate loan through certain types of homebuyer assistance programs, for which you should receive Truth-in-Lending disclosures.

   Sources 6 · What is a Loan Estimate? (last reviewed Aug 9, 2024): 'a three-page form that you receive after applying for a mortgage'; 'within three business days of receiving your application'; 'All lenders are required to use the same standard Loan Estimate form'; 'the lender has not yet approved or denied your loan application'; 'A home equity line of credit (HELOC)'; 'A manufactured housing or mobile home loan not secured by real estate'; 'A subordinate loan through certain types of homebuyer assistance programs'; 'you should receive Truth-in-Lending disclosures' · Checked October 17, 2026

6. Under Regulation Z, the creditor must deliver or mail the Loan Estimate not later than the third business day after receiving the application, and not later than the seventh business day before consummation.

   Sources 7 · 12 CFR §1026.19(e)(1)(iii)(A) ('not later than the third business day after the creditor receives the consumer's application') and (B) ('not later than the seventh business day before consummation of the transaction') · Checked October 17, 2026

7. Under Regulation Z, neither the creditor nor any other person may charge you a fee in connection with your application before you have received the Loan Estimate and told the creditor you intend to proceed, except a bona fide and reasonable fee for obtaining your credit report; and any written estimate of terms or costs given before the Loan Estimate must state at the top of the first page: 'Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.'

   Sources 7 · 12 CFR §1026.19(e)(2)(i)(A) ('neither a creditor nor any other person may impose a fee on a consumer in connection with the consumer's application'; 'indicated to the creditor an intent to proceed'), (e)(2)(i)(B) ('a bona fide and reasonable fee for obtaining the consumer's credit report') and (e)(2)(ii) ('Your actual rate, payment, and costs could be higher. Get an official Loan Estimate before choosing a loan.') · Checked October 17, 2026

8. Under Regulation Z, the Loan Estimate states whether the interest rate is locked ('Rate Lock') and, if so, the date and time that period ends; and it states that the interest rate, points and lender credits may change unless the rate has been locked, along with the date and time at which the estimated closing costs expire.

   Sources 4 · 12 CFR §1026.37(a)(13): 'whether the interest rate … is locked for a specific period of time'; 'the date and time (including the applicable time zone) when that period ends'; 'the interest rate, any points, and any lender credits may change unless the interest rate has been locked'; 'at which estimated closing costs expire' · Checked October 17, 2026

9. According to the CFPB, it is illegal for lenders to deliberately underestimate the costs on your Loan Estimate; there are three categories of closing costs: those that can increase by any amount (prepaid interest, property insurance premiums, initial escrow deposits, required services you shopped for with a provider not on the lender's written list, and third-party services the lender does not require), those that cannot increase at all (fees paid to the lender, mortgage broker or an affiliate of either for a required service; required services you were not allowed to shop for, when the provider is not affiliated; and transfer taxes) and those whose total cannot increase by more than 10 percent (recording fees, and required services with a provider from the lender's written list; if that provider is an affiliate of the lender, the cost cannot change at all). Under certain circumstances these rules do not apply: with a 'change in circumstances' (for example, you change the kind of loan or your down payment, the appraisal comes in higher or lower than expected, you took out a new loan or missed a payment and that changed your credit, or the lender could not document your overtime, bonus or other income) costs can change and you will likely receive a revised Loan Estimate; if costs went above the allowed limits without a change in circumstances, you are entitled to a refund of the amount above the limits.

   Sources 8 · Can my final mortgage costs increase from what was on my Loan Estimate? (last reviewed Sep 11, 2024): 'It is illegal for lenders to deliberately underestimate the costs on your Loan Estimate'; 'under certain circumstances these rules do not apply'; 'Some closing costs the lender can increase by any amount, some the lender can increase by up to 10 percent, and some the lender can’t increase at all'; 'Transfer taxes'; 'Recording fees'; 'if the provider is an affiliate of the lender, the cost cannot change at all'; 'The appraisal on the home you want to buy came in higher or lower than expected'; 'These types of situations are called a “change in circumstances”'; 'you are entitled to a refund of the amount above the allowable limits' · Checked October 17, 2026

10. Under Regulation Z, an estimated closing cost is in good faith if what you pay does not exceed the amount originally disclosed, with exceptions; charges for third-party services and recording fees are in good faith if their total does not exceed the total disclosed by more than 10 percent, the service is not paid to the creditor or an affiliate and the creditor let you shop for the provider; and prepaid interest, property insurance premiums, escrow amounts, services from providers you chose that are not on the list, property taxes and services the creditor does not require are in good faith if consistent with the best information reasonably available to the creditor, even if you end up paying more.

    Sources 7 · 12 CFR §1026.19(e)(3)(i) ('does not exceed the amount originally disclosed'), (e)(3)(ii)(A)–(C) ('by more than 10 percent'; 'not paid to the creditor or an affiliate of the creditor'; 'permits the consumer to shop') and (e)(3)(iii) ('consistent with the best information reasonably available to the creditor') · Checked October 17, 2026

11. Under Regulation Z, the creditor may use a revised estimate because of a changed circumstance, a change affecting your eligibility, revisions you request, points or lender credits that change because the rate was not locked, or if you indicate an intent to proceed more than 10 business days after the Loan Estimate is provided (or any longer period the creditor specifies); and you must receive the revised Loan Estimate not later than four business days before consummation.

    Sources 7 · 12 CFR §1026.19(e)(3)(iv)(A)–(E) ('Changed circumstance affecting settlement charges'; 'Changed circumstance affecting eligibility'; 'Revisions requested by the consumer'; 'because the interest rate was not locked'; 'more than 10 business days, or more than any additional number of days specified by the creditor') and (e)(4)(ii) ('The consumer must receive any revised version … not later than four business days prior to consummation') · Checked October 17, 2026

12. Under Regulation Z, the creditor must ensure that you receive the Closing Disclosure no later than three business days before consummation.

    Sources 7 · 12 CFR §1026.19(f)(1)(ii)(A): 'the creditor shall ensure that the consumer receives the disclosures … no later than three business days before consummation' · Checked October 17, 2026

13. Under Regulation Z, if what you paid exceeds the good faith limits, the creditor complies if it refunds the excess to you no later than 60 days after consummation.

    Sources 7 · 12 CFR §1026.19(f)(2)(v): 'refunds the excess to the consumer no later than 60 days after consummation' · Checked October 17, 2026

14. The CFPB's 'Your home loan toolkit' recommends getting at least three offers in writing; says lenders can charge you only a small fee for getting your credit report to give you a Loan Estimate, and some charge nothing; that Total Loan Costs are shown in Section D; that you should concentrate on the costs in Sections A and B because you can shop for the services in Section C no matter which lender you choose; that Section J shows lender credits; and that the seller cannot require you to buy a title insurance policy from a particular title company.

    Sources 9 · Your home loan toolkit (last updated July 2026), Section 1, p. 9: 'Get at least three offers—in writing'; 'Lenders can charge you only a small fee for getting your credit report—and some lenders provide the Loan Estimate without that fee'; 'Total Loan Costs are shown in Section D'; 'Concentrate on the costs in Sections A and B, because you can shop for the services in Section C, no matter what lender you choose. Section J shows lender credits.'; Section 2, p. 15: 'The seller cannot require you to buy a title insurance policy from a particular title company' · Checked October 17, 2026

15. The CFPB's Loan Estimate Explainer recommends comparing origination charges with other lenders' Loan Estimates because it is the total that matters; says the services you cannot shop for are required and chosen by the lender, so you should compare their overall cost with other Loan Estimates; that for FHA, VA or USDA loans the upfront mortgage insurance premium or funding fee appears in that section; that it is important to request Loan Estimates for the same kind of loan from different lenders; that the homeowner's insurance premium is set by the insurance company, which you choose, and you usually pay the first 6 to 12 months at or before closing; and that property taxes are set by your local or state government, so you should check that the lender estimated them accurately.

    Sources 2 · Loan Estimate Explainer, page 2 and page 3: 'It’s the total that matters'; 'required and chosen by the lender'; 'compare the overall cost of the items in this section to the Loan Estimates from other lenders'; 'the upfront mortgage insurance premium or funding fee will appear in this section'; 'request Loan Estimates for the same kind of loan from different lenders'; 'You get to choose your homeowner’s insurance company'; 'Usually you’ll pay the first 6 to 12 months of homeowner’s insurance premiums at or before closing'; 'Property taxes are set by your local or state government, not by the lender' · Checked October 17, 2026

16. According to the CFPB, you can shop for all of the services in section C of page 2 of your Loan Estimate; the lender must give you a written list of closing service providers when it gives you the Loan Estimate; and you may be able to use a provider not on the list as long as the lender agrees to work with it.

    Sources 10 · What required mortgage closing services can I shop for? (last reviewed Aug 8, 2024): 'You can shop for all of the services listed in section C of page 2 of your Loan Estimate'; 'The lender must provide you with a written list of closing service providers when they give you the Loan Estimate'; 'as long as the lender agrees to work with that service provider' · Checked October 17, 2026

17. Under Regulation Z, if you are allowed to shop for a settlement service, the creditor must give you a written list of available providers stating that you may choose a different provider, with at least one provider for each service you can shop for.

    Sources 7 · 12 CFR §1026.19(e)(1)(vi)(C): 'a written list identifying available providers of that settlement service and stating that the consumer may choose a different provider for that service'; 'at least one available provider for each settlement service' · Checked October 17, 2026

18. According to the CFPB, closing costs can add up to thousands of dollars and estimates vary widely among lenders; lenders or real estate agents might recommend providers they have a relationship with, and default providers often may be affiliates of the lender; title services are the largest costs in this category and in most cases you can shop for them; they include title insurance, the title search and, in most parts of the country, the fee for the closing agent; it recommends asking for price quotes and references from recent customers; most lenders require a lender's title insurance policy, and you may want an owner's policy, which protects your investment; and when comparing title costs you should compare the bottom-line total.

    Sources 11 · Shop for title insurance and other closing services (last modified Dec. 12, 2024): 'Closing costs can add up to be thousands of dollars'; 'vary widely among lenders'; 'Lenders or real estate agents might recommend providers they have a relationship with'; 'Title services are the largest costs in this category'; 'In most parts of the country, title services also include the fee for the closing agent'; 'Ask for a price quote and references from recent customers'; 'Most lenders require you to buy a lender’s title insurance policy'; 'protects your financial investment in the home'; 'often may be affiliates (related companies) of the lenders'; 'compare the bottom-line total' · Checked October 17, 2026

19. According to the CFPB, points (discount points) lower your interest rate in exchange for paying more at closing, and one point equals one percent of the loan amount; they appear on page 2, Section A, of the Loan Estimate and Closing Disclosure; lender credits lower your closing costs in exchange for a higher interest rate and appear as a negative number on page 2, Section J; and when comparing offers it recommends asking each lender for the same amount of points or credits.

    Sources 12 · How should I use lender credits and points (also called discount points)? (last reviewed Oct 19, 2023): 'Points lower your interest rate, in exchange for paying more at closing. Lender credits lower your closing costs up front, in exchange for a higher interest rate.'; 'One point equals one percent of the loan amount'; 'page 2, Section A'; 'page 2, Section J'; 'ask for the same amount of points or credits from each lender' · Checked October 17, 2026

20. According to the CFPB, all mortgages involve services and costs to originate them, even if some are advertised with no lender fees or no closing costs; lenders do this by charging a higher interest rate and giving you a credit, or by adding the closing costs to your loan amount; a higher rate means paying more over time, and a higher loan amount increases your payments and reduces your equity.

    Sources 13 · Is there such a thing as a no-cost or no-closing cost loan or refinancing? (last reviewed Apr 3, 2024): 'There are services rendered and costs related to originate all mortgages'; 'charging you a higher interest rate and giving you a credit'; 'adding the closing costs to your loan amount'; 'increase your payments and reduce your equity' · Checked October 17, 2026

21. Under Regulation Z, in the Loan Estimate's cash-to-close calculation, what the seller will pay toward loan costs and other costs appears as a negative number on the 'Seller Credits' line, and costs paid by persons other than the loan originator, creditor, consumer or seller go under 'Adjustments and Other Credits'.

    Sources 4 · 12 CFR §1026.37(h)(1)(vi) ('The total amount that the seller will pay for total loan costs'; 'disclosed as a negative number'; 'Seller Credits') and (h)(1)(vii) ('paid by persons other than the loan originator, creditor, consumer, or seller'; 'Adjustments and Other Credits') · Checked October 17, 2026

22. Under Regulation Z, the Closing Disclosure shows loan costs and other costs in columns stating whether each charge was borrower-paid, seller-paid or paid by others, at or before closing.

    Sources 14 · 12 CFR §1026.38(f) and (g): 'with columns stating whether the charge was borrower-paid at or before closing, seller-paid at or before closing, or paid by others' · Checked October 17, 2026

23. According to the CFPB, many states and local organizations offer programs to help first-time buyers with a down payment or closing costs; to find them, it suggests looking up a HUD-approved housing counseling agency in your area or calling the HOPE Hotline, 24 hours a day, seven days a week, at (888) 995-4673.

    Sources 15 · Where can I find information on programs for first-time home buyers? (last reviewed Sep 13, 2024): 'Many states and local organizations offer programs to help first-time buyers with a down payment or closing costs'; 'look up a HUD-approved housing counseling agency in your area'; 'HOPE™ Hotline, 24 hours a day, seven days a week, at (888) 995-HOPE (4673)' · Checked October 17, 2026

24. The CFPB warns that during closing, scammers send spoofed emails posing as the real estate agent, settlement agent, legal representative or another trusted individual with false instructions for wiring closing funds, attempting to divert your closing costs and down payment by confirming or suggesting last-minute changes to your wiring instructions. It recommends identifying two trusted individuals to confirm the closing process and payment instructions; before wiring, confirming the instructions, including the account name and number, in person or by the phone number you previously agreed to; never following instructions contained in an email; avoiding phone numbers or links in an email; not emailing financial information; and, if it happens, contacting your bank or wire-transfer company immediately to ask for a wire recall and filing a complaint with the FBI's Internet Crime Complaint Center (ic3.gov); it notes the ultimate cost to victims could be the loss of their life savings.

    Sources 16 · Mortgage closing scams: How to protect yourself and your closing funds (Jun 3, 2019): 'divert your closing costs and down payment into a fraudulent account by confirming or suggesting last-minute changes to your wiring instructions'; 'posing as the real estate agent, settlement agent, legal representative or another trusted individuals'; 'Identify two trusted individuals'; 'Never follow instructions contained in an email'; 'including the account name and number'; 'Avoid using phone numbers or links in an email'; 'Do NOT email financial information'; 'Ask for a wire recall'; 'www.ic3.gov'; 'The ultimate cost to victims could be the loss of their life savings' · Checked October 17, 2026

25. Freddie Mac says that, typically, you should be prepared to pay between 2% and 5% of the home purchase price in closing costs.

    Sources 1 · What Are Closing Costs and How Much Will I Pay?: 'Typically, you should be prepared to pay between 2% and 5% of the home purchase price in closing fees.' · Checked October 17, 2026

26. HUD-approved housing counselors provide independent advice on buying a home, renting, defaults and credit issues, often free or at low cost.

    Sources 17 · Find a Housing Counselor: 'Housing counselors throughout the country can provide advice on buying a home, renting, defaults, forbearances, foreclosures, and credit issues'; 'they can offer independent advice, often at little or no cost to you' · Checked October 17, 2026