Closing costs and seller credits

Closing costs are the fees and prepaid expenses you pay to complete the purchase, on top of the home's price. They're separate from your down payment.

What closing costs usually include

• Title search, title insurance, and settlement or escrow fees
• Recording fees and transfer taxes, where they apply
• Lender and loan-related fees, if you're financing
• Appraisal and inspection fees
• Prepaid items, such as property taxes and homeowners insurance

How seller credits help

A seller credit is an amount the seller agrees to pay toward your closing costs. It's written into the purchase contract, and it reduces the cash you need at closing. Credits are negotiated, and there are limits that depend on the type of loan and the rules that apply to it.

Ask early

Ask your agent or closing agent for an estimate of closing costs as soon as you're under contract. Ask how a seller credit would be documented, and confirm the amount before closing day.