Frequently Asked Questions

Closing costs are the expenses associated with arranging and completing a mortgage transaction.

Depending on your loan, they may include:

• Lender charges: Origination, underwriting, processing, or other applicable lender fees.
• Third-party services: Appraisal, credit report, title, settlement, or other required services.
• Government charges: Applicable recording and other government-related fees.
• Prepaid expenses: Interest or insurance collected in advance.
• Initial escrow deposits: Funds collected for future property taxes or insurance when applicable.

Not every charge applies to every transaction, and the amounts can vary based on the lender, property, location, and loan program.

We’ll help you review your Loan Estimate and understand which expenses make up the total cash needed at closing.

We compare more than interest rates when reviewing available lender options.

Different lenders may structure their origination charges, discount points, and lender credits differently.

For example, one option may offer a lower rate with additional upfront charges, while another may reduce certain upfront expenses through lender credits.

Our team can help you compare:

• Interest rate and APR
• Lender-controlled charges
• Discount points
• Lender credits
• Estimated third-party expenses
• Total cash needed at closing

Some third-party charges may remain similar regardless of the lender, while others can vary.

We’ll explain the differences so you can evaluate the overall loan terms and costs rather than focus on one fee.

Lender fees are charges associated with originating or processing the mortgage, depending on the lender’s pricing structure.

They may include origination, underwriting, processing, or administrative charges.

Third-party costs are charged for services provided by other companies or professionals involved in the transaction.

Examples include:

• Appraisal services
• Credit reports
• Title searches
• Title insurance
• Settlement or escrow services
• Certain recording or property-related services

Some third-party services may be shoppable, subject to the lender’s requirements.

We’ll help you understand which charges are lender-related, which come from outside providers, and where you may have choices.

Prepaid interest is the mortgage interest that accrues between your loan’s closing date and the period covered by your first regular mortgage payment.

For example, if your loan closes in the middle of a month, interest may be collected at closing for the remaining days before the next payment cycle begins.

The amount depends on:

• Your loan balance
• Interest rate
• Applicable daily interest calculation
• Number of days being collected

Prepaid interest isn’t a separate lender origination fee. It’s interest on the new mortgage collected upfront.

You’ll generally see it listed among the prepaid expenses in your Loan Estimate and Closing Disclosure.

Discount points are upfront charges that can be paid to obtain a lower mortgage interest rate.

One point equals 1% of the loan amount. However, the amount by which a point reduces the rate varies.

For example, paying points may increase your upfront expenses but reduce your monthly principal-and-interest payment.

Whether that makes sense depends on how much the points cost, the monthly savings, and how long you expect to keep the mortgage.

We can help you compare loan options with different point structures and estimate how long it could take for the interest savings to recover the additional upfront expense.

Potentially, yes.

Depending on current lender pricing and your qualifications, you may have options that include:

• Paying discount points for a lower rate
• Choosing a rate with no discount points
• Accepting lender credits to offset eligible closing expenses

A no-point mortgage doesn’t mean the loan has no other closing costs.

The interest rate and other pricing terms may also differ from an option that includes points.

We’ll help you review the available choices so you understand what you’re paying upfront and how the pricing affects your mortgage.

Lender credits are amounts provided through the mortgage pricing structure that can offset certain eligible closing costs.

In many situations, a lender credit is associated with a higher interest rate than another available option.

For example, a borrower may choose a loan with lender credits to reduce certain upfront expenses, accepting a different monthly payment in exchange.

The appropriate choice depends on your cash available for closing, budget, expected time in the loan, and overall financing goals.

We’ll explain the credit amount, the corresponding interest rate, and any relevant restrictions before you decide.

Sometimes. Depending on your purchase contract and loan program, the seller may be able to contribute toward certain eligible closing expenses.

These contributions are often called seller concessions or seller-paid closing costs.

However, lenders and programs impose limits on the amounts and expenses that can be covered.

For example, contribution limits may depend on the loan type, property occupancy, and down payment.

Your real estate agent can help negotiate the purchase contract, while we’ll explain the mortgage program’s applicable rules and how the contribution may affect your cash needed at closing.

For some eligible refinances, certain closing expenses may be added to the new loan amount instead of being paid upfront.

This may reduce your immediate cash requirement, but it also increases the amount you’re borrowing and can affect your payment and total interest expense.

Another possibility is using lender credits to offset certain eligible charges, depending on available pricing.

Purchase transactions have different requirements and may involve seller contributions or other permitted arrangements.

We’ll review what’s allowed for your transaction and help you understand the tradeoffs before moving forward.

A Loan Estimate is a standardized disclosure that provides important estimated information about a mortgage you’re considering.

It includes items such as the loan amount, interest rate, projected payment, and estimated closing costs.

A Closing Disclosure provides final loan terms and closing-cost information before the transaction is completed.

For most covered mortgages, you must receive the Closing Disclosure at least three business days before consummation, subject to applicable rules.

When you receive these documents, we encourage you to review:

• Loan amount and interest rate
• Monthly payment
• Discount points and lender credits
• Lender and third-party charges
• Prepaid and escrow amounts
• Cash needed to close

Our team can help you understand the mortgage-related figures and address questions about differences between the initial estimates and the final disclosures.