Closing Costs Calculator

Closing Costs Calculator glossary

Loan Origination Fee

What your lender charges to process, underwrite, and fund the loan, usually 0.5%–1% of the loan amount. Some lenders bundle this with other charges as a single "processing" or "underwriting" fee instead.

Discount Points

An optional, fully upfront fee — 1 point equals 1% of the loan amount — you pay to "buy down" your interest rate for the life of the loan. Worth it only if you plan to keep the loan long enough for the lower monthly payment to recoup the upfront cost.

Appraisal Fee

Pays a licensed, independent appraiser to confirm the home is worth at least what you're paying for it. Your lender requires this because the home is their collateral — they won't lend more than it's actually worth.

Credit Report Fee

A small flat fee your lender passes through for pulling your tri-merge credit report and score from all three bureaus, used to underwrite and price your loan.

Title Insurance

A one-time policy protecting against defects in the property's title — unpaid liens, forged signatures, or ownership disputes from a prior owner that surface after you've bought the home. Lender's title insurance is usually required; owner's title insurance is optional but recommended.

Title Search / Settlement Fee

Pays a title company or attorney to research the property's ownership history for unresolved liens or claims, then run and document the actual closing (settlement) transaction.

Attorney Fee

A flat fee for a real estate attorney to review or prepare closing documents and represent your interests at the closing table — required by law in some states, optional in others.

Survey Fee

Pays a licensed surveyor to confirm the property's legal boundaries and flag any encroachments (a neighbor's fence over the line, etc.) — often required by the lender or title company, especially if no recent survey exists.

Home Inspection Fee

Pays a professional inspector to check the home's structure, roof, electrical, plumbing, and major systems before you're locked into the purchase. Not required by lenders, but one of the best-value protections a buyer can pay for.

Transfer Tax

A state or local tax on transferring property ownership, calculated as a percent of the sale price. Rate and who customarily pays it (buyer or seller) varies enormously by state and even by county.

Recording Fee

A flat fee your county charges to officially record the new deed and mortgage in the public land records, making your ownership and the lender's lien a matter of public record.

Upfront Mortgage Insurance / Funding Fee

A one-time charge on government-backed loans: FHA's Upfront Mortgage Insurance Premium (≈1.75% of the loan) or the VA funding fee (which varies by down payment and whether it's your first VA loan). Conventional loans don't have this upfront charge, though ongoing monthly PMI can still apply.

Escrow Reserve

Months of property tax and homeowners insurance your lender collects upfront to seed the escrow account it uses to pay those bills on your behalf going forward, so the account never runs short before the next annual bill comes due.

Prepaid Interest

Interest for the days between your closing date and the end of that calendar month, since mortgage payments are made in arrears (your first regular payment covers the following month).

Seller Credit

An amount the seller agrees to contribute toward your closing costs, negotiated as part of the purchase offer — common in a buyer's market or when a home appraises for more than the sale price.

Lender Credit

A credit from your lender that offsets your closing costs, typically given in exchange for accepting a slightly higher interest rate — the inverse trade-off of paying discount points.

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