Mortgage Glossary
Closing Costs
Also called: closing cost, cash to close costs, settlement costs
Definition
The lender, title, government and prepaid costs due at closing, separate from your down payment.
Why it matters
Closing costs are frequently underestimated by first time buyers, and seller credits or lender credits can offset some of them.
Related terms
- Cash to Close
- The total funds you must bring to closing: down payment plus closing costs and prepaids, minus credits and your earnest money deposit.
- Loan Estimate
- A standardized three page disclosure showing your estimated rate, payment, closing costs and cash to close, required within three business days of a complete application.
- Seller Credit
- Money the seller agrees to contribute toward the buyer's closing costs or a rate buydown, limited by loan program rules.
Written by
Manny Oloyede, Mortgage Broker
NMLS #1824463 | Ultimate Mortgage Brokers LLC NMLS #2619461 | Licensed in OH | KY | NC | PA | SC | TN | TX
I have worked in mortgage lending since 2018 out of the Akron / Cuyahoga Falls Branch, helping buyers, homeowners and investors across Northeast Ohio and every state where I am licensed. These guides reflect the questions I answer most often, written the way I would explain them on a call.
General education only, not financial, legal or tax advice, and not a commitment to lend. Guidelines vary by program and change over time. Manny Oloyede, NMLS #1824463. Ultimate Mortgage Brokers LLC, NMLS #2619461. Licensed in OH | KY | NC | PA | SC | TN | TX. Equal Housing Opportunity.
Want this applied to your actual numbers?
Definitions are the easy part. What matters is how the guideline reads against your income, credit and property.