When it comes to buying a home, there are many costs to consider in addition to the price of the house itself. One of the most significant costs you’ll encounter is mortgage closing costs. Mortgage closing costs are the fees and charges associated with the process of taking out a mortgage. In this blog post, we’ll explore what fees are typically included in mortgage closing costs.

Application fees

Many lenders charge an application fee to cover the cost of processing your loan application. This fee can vary depending on the lender and the type of loan you’re applying for. It’s important to note that some lenders may waive the application fee or roll it into your overall closing costs.

Credit report fees

Before approving your loan application, the lender will typically run a credit check to assess your creditworthiness. The cost of this credit report is usually passed on to the borrower in the form of a credit report fee.

Appraisal fees

An appraisal is a professional assessment of the value of the property you’re purchasing. This fee covers the cost of the appraisal, which is required by most lenders to ensure that the property is worth the amount of money you’re borrowing.

Title search and insurance fees

A title search is conducted to ensure that the property you’re purchasing has a clear title and that there are no liens or other claims on the property. Title insurance protects the lender (and you, if you opt to purchase owner’s title insurance) from any legal disputes or claims that may arise after you take ownership of the property. The fees for the title search and title insurance are typically included in your closing costs.

Homeowners insurance

Homeowners insurance is a type of insurance that protects your home and personal property against damage or loss from various types of incidents, such as fire, theft, and natural disasters. This insurance is typically required by the lender and is included in your closing costs.

Property taxes

When you purchase a home, you’ll be responsible for paying property taxes on the home. Depending on when you close on the property, you may need to pay a prorated amount of property taxes at closing.

Origination fees

An origination fee is a fee charged by the lender to cover the costs of processing your loan. This fee is typically a percentage of the loan amount and is included in your closing costs.

Closing or attorney fees

Closing or attorney fees cover the cost of hiring an attorney or closing agent to handle the closing process. These fees can vary depending on the location and complexity of the transaction.

Prepaid interest

Prepaid interest is the interest that accrues on your loan from the date of closing to the end of the month. This fee is usually included in your closing costs and can be significant depending on the loan amount and interest rate.


Mortgage closing costs can be a significant expense when buying a home, so it’s important to be aware of what fees are included. By understanding these fees, you can better prepare for the costs associated with taking out a mortgage. Be sure to discuss these fees with your lender and real estate agent to ensure you have a complete understanding of the costs involved in buying a home. With careful planning and preparation, you can successfully navigate the mortgage closing process and enjoy your new home.