Mortgages & Financing

What are closing costs and what do they include?

By Steve Lockhart

The short answer

Closing costs are the one-time fees paid to create and transfer the mortgage, and they are separate from your down payment.

Full answer

Closing costs are the one-time fees paid to create and transfer the mortgage, and they are separate from your down payment. The list usually includes the lender origination fee, the appraisal, the credit report, title and escrow charges, recording fees, prepaid interest from closing to the first payment, and the initial deposits that fund your tax and insurance escrow. For a buyer in Las Vegas the package commonly runs about 2 to 5 percent of the purchase price. You never have to guess the figure: every lender issues a Loan Estimate with the full list within days of application, and that document is the truth. You can shop the service fees behind the lines, ask the seller to contribute within program limits, and compare one lender to the next balancing the same list. The closing table goes smoothly when the number is written into the plan months early, which is how we treat it here.

Go a little deeper

Frequently asked

Questions people often follow up on

How much should I budget for closing?

A practical Las Vegas range is 2 to 5 percent of the purchase price, with the Loan Estimate refining it to the exact dollar. The estimate arrives within days of application, so the guesswork is short. We budget at the top of the range and are pleased when the paper lands under it.

Can the seller pay some of my closing costs?

In most programs the seller can contribute toward the buyer closing costs up to a limit. It is a standard negotiation point written directly into the purchase contract. Asking for it is normal; understanding how the market responds is the skill, and we study the comparable deals before we ask.

Is there such a thing as a no closing cost loan?

The name is a marketing shortcut. A no closing cost loan usually folds the fees into the rate, so you pay them slowly across the loan instead of at the table. It can fit a short-term plan and cost more over time. The two versions sit side by side before you choose.

The Lockhart Method

Your Home | My Strategy | Proven Results

My strategy: put the closing line into the budget in week one, the estimate, the seller contribution, the reserve, so the closing table becomes the planned finish line. We arrive with the numbers aligned, and no white envelopes at the end.

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