In short
No federal source gives a “typical” closing-cost percentage, so read your own forms. Under the TILA-RESPA Integrated Disclosure rule (TRID, 12 CFR 1026.19), your lender must give you a Loan Estimate within three business days of your application and a Closing Disclosure at least three business days before closing (CFPB). Both use the same line layout, so you can compare them line by line.
What are closing costs?
The CFPB defines mortgage closing costs as “all of the costs you will pay at closing.” They come from the lender, from third parties the lender requires, from governments and from prepaid items. Which ones you pay and who pays them depends on your sales contract and your state. See steps to buy a home for where this fits.
The two forms
The Loan Estimate is a three-page form. Every lender must use the same standard form (CFPB). It shows the estimated rate, monthly payment, closing costs and cash to close. Receiving one is not an approval or a denial.
The Closing Disclosure is a five-page form with final details. Page 1 shows loan terms and projected payments, page 2 the closing costs, page 3 the cash to close, page 4 payment rules and loan features, and page 5 contract details and cost measures such as APR (CFPB). Compare it with your latest Loan Estimate and ask the lender about any difference. Loans such as reverse mortgages and home equity lines of credit use other disclosures instead.
Line by line
Regulation Z (12 CFR 1026.37) fixes the order of the closing cost section. Here is what each block means.
| Block | What it contains | Notes |
|---|---|---|
| Origination charges | Fees paid to the lender and loan originator, with any points listed first as a percentage of the loan | The CFPB says the total matters most when comparing lenders |
| Services you cannot shop for | Services the lender requires and chooses; FHA, VA or USDA program fees and private mortgage insurance premiums may appear here (CFPB) | Title items start with “Title” |
| Services you can shop for | Required services where you may pick a provider from the lender’s list or look elsewhere after checking with the lender | Title items start with “Title” |
| Total loan costs | Sum of the three blocks above | |
| Taxes and other government fees | Recording fees and other taxes, and, on a separate line, consumer-paid transfer taxes | |
| Prepaids | Homeowners insurance premium, mortgage insurance premium, prepaid interest and property taxes, each with its time period | The CFPB says the first 6 to 12 months of homeowners insurance are usually paid at or before closing |
| Initial escrow payment at closing | Starting deposit into your escrow account for insurance, mortgage insurance and property taxes, shown as monthly amount times months | Funds your escrow account |
| Other | Other amounts you are likely to pay to someone other than the lender; optional insurance ends with “(optional)“ | |
| Total other costs | Sum of the blocks from taxes through “Other” | |
| Total closing costs | Total loan costs plus total other costs, minus lender credits | Lender credits show as a negative number |
Two terms in this table need a plain explanation. Points are an upfront fee paid for a lower interest rate. Lender credits are a rebate that may come with a higher interest rate (CFPB). The CFPB defines an origination fee as “what the lender charges the borrower for making the mortgage loan,” and prepaid interest as charges due at closing for the daily interest that accrues on your loan.
A lender’s title insurance policy “protects your lender against problems with the title to your property” (CFPB). Title costs may be itemized differently on your lender’s forms and the title company’s papers; add up all title-related lines and compare the bottom line. See title insurance explained, what an appraisal costs and homeowners insurance.
Which costs can change after the Loan Estimate?
Regulation Z limits increases, with three groups (12 CFR 1026.19(e)(3); CFPB):
| Group | Costs | Limit |
|---|---|---|
| Cannot increase | Fees paid to the lender, mortgage broker or their affiliates for a required service; fees for required services you were not allowed to shop for, from unaffiliated providers; transfer taxes | Zero, unless there is a change in circumstances |
| Up to 10 percent | Recording fees; required services from a provider on the lender’s written list (if an affiliate of the lender, no change at all) | The total may exceed the estimate by no more than 10 percent |
| No limit | Prepaid interest, property insurance premiums and initial escrow deposits; services you shop for with a provider not on the lender’s list; third-party services the lender does not require | The estimate must be based on the best information reasonably available |
Example, with assumed numbers: if the Loan Estimate shows $400 of recording fees and listed-provider charges in the 10 percent group, the same group may total up to $440 at closing. If your lender’s own origination fee was $1,500, it may not exceed $1,500 unless a change in circumstances occurs.
A change in circumstances can lift the limits. The CFPB lists a different loan type or down payment, an appraisal that comes in higher or lower than expected, new debt or a missed payment affecting your credit, and income the lender could not document. If costs exceed the allowed limits without such a change, you are entitled to a refund of the excess. The CFPB also states that it is illegal for lenders to deliberately underestimate costs.
Cash to close
Cash to close is the amount you pay at closing, typically by cashier’s check or wire. It combines your down payment, closing costs and deposits, minus seller credits and amounts already paid (CFPB). Wire only to instructions you have confirmed by a phone number you already trust; the CFPB warns that scammers target buyers days before closing. Your earnest money deposit may be applied toward closing costs or the down payment.
Where states differ
Federal law decides how costs are disclosed. States and local governments decide what some of them are: transfer taxes, recording fees, title insurance pricing, who customarily pays each item, and whether an attorney is involved. See the state guides for Texas and California.
Frequently asked questions
How much are closing costs?
No official source gives a typical figure. Your total depends on your loan, your contract, your state and your closing date. Your Loan Estimate shows the lender’s estimate of total closing costs.
Can my closing costs go up?
Some can and some cannot. Lender fees and transfer taxes generally cannot, recording fees may rise up to 10 percent as a group, and prepaid items and escrow deposits have no cap (CFPB).
What is the difference between prepaids and escrow?
Prepaids are items such as prepaid interest, insurance premiums and property taxes paid at closing for a set period. The initial escrow payment starts your escrow account, from which the lender pays future insurance and tax bills.
Can I shop for title insurance and other services?
You can for the services listed under “services you can shop for,” after checking with the lender. For services in the other block, the lender chooses the provider (CFPB).
What should I do if I find an error?
Ask the lender to explain or correct it before closing. The CFPB says to compare the bottom-line total when title costs look different between documents.
More buying guides
- Steps to buy a home in the United States
- How long does it take to buy a home?
- Earnest money: how much and when you get it back
- Buyer agreements after the 2024 NAR settlement
- Real estate commission: how agents are paid now
- Home inspection cost and what it covers
- Home appraisal cost and how it works
- Land survey cost and when you need one
- Buying land: costs, financing and checks
- Title insurance explained
Sources
- What is a Loan Estimate? (Consumer Financial Protection Bureau) (consulted October 13, 2026)
- Loan Estimate explainer (Consumer Financial Protection Bureau) (consulted October 13, 2026)
- What is a Closing Disclosure? (Consumer Financial Protection Bureau) (consulted October 13, 2026)
- Closing Disclosure explainer (Consumer Financial Protection Bureau) (consulted October 13, 2026)
- Can my final mortgage costs increase from what was on my Loan Estimate? (Consumer Financial Protection Bureau) (consulted October 13, 2026)
- Mortgage key terms (Consumer Financial Protection Bureau) (consulted October 13, 2026)
- What should I do if I find an error in my closing documents? (Consumer Financial Protection Bureau) (consulted October 13, 2026)
- 12 CFR 1026.37, Content of disclosures for certain mortgage transactions: Loan Estimate (Regulation Z, Legal Information Institute) (consulted October 13, 2026)
- 12 CFR 1026.19, Certain mortgage and variable-rate transactions (Regulation Z, Legal Information Institute) (consulted October 13, 2026)