The down payment gets all the attention, but it is not the only cash you bring to closing. Closing costs — the collection of fees to originate the loan and transfer the property — typically add up to a meaningful percentage of the purchase price. Knowing what they are removes most of the surprise. All figures here are illustrative and subject to change; this is not a commitment to lend.
The major buckets
Closing costs fall into a few recognizable categories:
- · **Lender fees** — origination charges, and any discount points you choose to pay to lower your rate.
- · **Title and settlement** — title search, title insurance (lender's and owner's), and the closing agent's fee.
- · **Government charges** — recording fees and any transfer taxes your state or county imposes.
- · **Prepaids and escrow setup** — prepaid interest, the first year of homeowners insurance, and the initial deposit into your escrow account for taxes and insurance.
Prepaids are the category buyers most often forget, because they are not really "fees" — they are costs you would pay anyway, just collected at closing.
Buyer vs seller: who customarily pays
Custom varies by state and is always negotiable, but in general the buyer pays the loan-related costs, the lender's title policy, and the prepaids, while the seller often pays the owner's title policy and certain transfer charges. None of this is fixed; the purchase contract spells out the actual split for your transaction.
Seller concessions
In many transactions the buyer can negotiate seller concessions — the seller agreeing to credit a portion of the closing costs. There are limits on how much can be credited depending on the loan program and down payment, but concessions are a legitimate way to reduce the cash you need at the table. They are particularly useful when a buyer has the income to qualify but is tight on upfront cash.
Verify against your Loan Estimate
Your Loan Estimate lists these costs early. Your Closing Disclosure restates them near the end. Line the two up: certain fees cannot increase, and others are limited in how much they can rise. If something jumped outside its allowed tolerance, ask — the lender may owe you the difference.
The Alliance take
We give clients a realistic closing-cost picture up front, including the prepaids people forget, so the cash-to-close number on the Closing Disclosure is not a shock. And where concessions make sense, we build them into the offer strategy.
Want a clear estimate before you write an offer? Start an application and we will produce a Loan Estimate you can plan around.