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The down payment and closing costs are different. A Loan Estimate helps you review expected loan costs, other transaction costs, prepaids and available credits.
Common categories include lender origination or underwriting charges; appraisal and credit-report fees; title search, title insurance, settlement or attorney services; recording and transfer charges; and property-specific items such as a survey or inspections. Which items apply—and who customarily pays them—depends on the loan, property, contract and location.
Cash due at closing may also include prepaid interest, homeowners-insurance premiums, property taxes and initial deposits to an escrow account. These amounts fund upcoming obligations and are shown separately from many lender and settlement fees on the federal disclosures.
After you apply and provide the required information, the Loan Estimate shows the proposed loan terms, projected payment, estimated closing costs and cash to close. Use it to ask which services you may shop for, how credits or discount points affect the structure and which estimates can change.
Before closing, compare the Closing Disclosure with the most recent Loan Estimate. Review the interest rate, loan amount, monthly payment, lender credits, seller credits, taxes, title charges, prepaids and final cash to close. Ask about any change you do not understand before signing.
When some upfront costs are offset by a lender credit or incorporated into the loan structure, the borrower may receive a higher interest rate, a larger loan balance or another pricing tradeoff. Compare the upfront savings with the expected monthly and long-term cost.
Closing costs vary widely by location, loan program, property, taxes, insurance, settlement provider and negotiated credits. A general percentage can be a planning aid, but the transaction-specific Loan Estimate and Closing Disclosure are the documents to rely on.
General information is useful. A mortgage professional can help you evaluate the facts that apply to you.
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