Closing costs explained

Last updated: 2026-08-14

Closing costs are upfront expenses tied to buying or refinancing a home. They can include lender fees, title fees, recording charges, prepaid items, discount points, and other settlement costs.

Cash needed vs loan balance

Some costs are paid in cash. Some refinance costs may be financed into the new loan. The distinction matters because financed costs increase the balance and can add interest over time.

Points

Discount points are upfront charges paid to reduce the rate. Whether points are worthwhile depends on the upfront cost, payment reduction, and how long the loan is kept.

Use the calculator

Use the closing costs calculator for upfront cash estimates and the mortgage points calculator to compare points against payment savings.