Closing Costs Checklist: What Home Buyers Pay and Who Gets It

On top of the down payment, a US home buyer pays the lender's charges, the title and settlement fees, the government's taxes and fees, and the first months of the home's own bills, which together typically come to 2 to 5% of the purchase price, according to the Consumer Financial Protection Bureau's homebuying guide (updated in 2025). Two forms list them, the Loan Estimate after you apply and the Closing Disclosure before you sign, and the CFPB asks buyers to compare the second with the first before closing.

How Much to Set Aside Before the Loan Estimate

Until a lender gives you its figures, the CFPB's range is the place to start. On a $400,000 home, 2 to 5% comes to $8,000 to $20,000, and none of it counts toward the down payment. Where you land depends on the price of the home, the size of your down payment, the lender's costs, the kind of loan and where the home is. The CFPB suggests a rough estimate early on, refined as you learn more, and taking that estimate from the cash you have for closing to see how much is left for the down payment.

You can negotiate with the seller for a credit toward your closing costs, but the CFPB notes (2024) that the seller will usually want a higher price in return. A lender can offer a credit too, and typically recovers it by raising the loan amount or the interest rate, so you still pay those costs through the loan instead of out of pocket.

The first itemised figure comes with the Loan Estimate, which the lender must send within three business days of receiving your application. Every lender uses the same three-page form, with the estimated interest rate, monthly payment and total closing costs in the same places, so two offers can be compared line by line.

Who Each Fee Pays

The fees on the Loan Estimate go to different parties, and knowing who gets each one tells you where you can shop around and where the only comparison is between lenders.

The Lender

The lender's own charges are the origination charges: an application fee, an underwriting fee, a processing fee or simply an origination fee, itemised in more or less detail depending on the lender. The CFPB's advice is to compare the total across Loan Estimates, since that is what you pay. Points are optional. Each point is 1% of the loan amount, paid at closing in exchange for a lower interest rate, so one point on a $100,000 loan is $1,000.

The lender also requires services it chooses itself, such as the appraisal. You can't shop for these separately, so here too the comparison is the total on each lender's Loan Estimate.

Title and Settlement

Title service fees (CFPB, 2024) cover the title search and the lender's title insurance, which is usually required to get a mortgage. Title insurance protects against someone later claiming a right to the home, often over a previous owner's unpaid taxes or a contractor who says they weren't paid. Owner's title insurance, which protects you, is your choice; if you buy it, it is listed in section H of the Loan Estimate.

Someone has to run the closing itself: a title agent, an escrow agent or a closing attorney, depending on where you live, and you can shop for the company that does it. The lender gives you a list of approved providers for the services you can shop for, and you can pick from the list or find your own, after checking with the lender.

State and County

The government's share sits under Taxes and Other Government Fees. Recording fees pay the city or county to record the new deed, and transfer taxes are charged by the state or local government on the change of ownership. Who pays them can vary, since depending on the contract or state law the seller may end up paying some of these costs.

The Costs That Are Your First Bills as an Owner

Part of the cash due at closing pays the home's running costs in advance: the CFPB lists prepaid property taxes, homeowners insurance and interest until your first payment is due. The CFPB's Loan Estimate guide (2025) says buyers usually pay the first 6 to 12 months of homeowners insurance at or before closing, and the insurer is yours to choose, so the premium on the form is worth checking against a quote of your own.

If your loan has an escrow account, which many lenders require so that taxes and insurance get paid, the account is opened with a deposit at closing. Homeowners association dues are often outside the escrow account, so ask how and when you pay them. The lender doesn't control prepaid interest, insurance premiums or the initial escrow deposit, so these may change by any amount between the two forms.

One bill can arrive after closing. In California a sale leads to a reappraisal, and the State Board of Equalization explains that the change in value is billed as a supplemental tax bill, separate from the annual property tax bill and prorated from the first day of the month after the sale to the end of the tax year in June. If the previous owner was taxed on a much lower value than you paid, the supplemental bill covers the difference, so ask your lender whether your escrow account will pay it or you will.

Checking the Closing Disclosure Against the Loan Estimate

The Closing Disclosure (CFPB, 2023) is a five-page form with the final loan terms, your projected monthly payments and your closing costs. The lender must give it to you at least three business days before you close, and those three days are for comparing it with the Loan Estimate and asking questions. The CFPB's closing checklist points to the table at the top of page three of the Closing Disclosure for that comparison.

Under the CFPB's rules (2024), the lender's own fees and transfer taxes can't increase at all and some other costs only a little, unless something changed, such as the loan or the appraisal. Ask the lender to explain any increase, since you are owed a refund of anything above the limits.

Closing funds attract scammers, so treat an email with last-minute changes to the wire instructions as a possible scam and confirm the details by calling a number you saved earlier. With both forms side by side, the CFPB's mortgage closing checklist comes down to these checks:

• The loan type, interest rate and monthly payment are the ones you expected, and match across every document.
• The closing costs and cash to close match your most recent Loan Estimate, or the lender has explained each difference.
• No fee is new, or has grown, without a reason you understand.
• You know whether you have an escrow account, what it pays, and how you'll pay any HOA dues.
• Your name and personal details are correct on every document.
• You know who conducts the closing, the exact amount due and whether to bring a cashier's check or send a wire transfer.
• You have the numbers of two trusted people, such as your real estate agent or settlement agent, saved to confirm payment instructions.
• You have inspected the home, and any repairs agreed with the seller have been done.

You have a right to read and understand every closing document, however long it takes, and the CFPB's advice is not to go forward until you are comfortable.

If you're still comparing homes, a floor plan and a virtual tour help you rule out the wrong ones before you pay for an appraisal or an inspection.