Closing Costs

Closing costs are the fees and charges paid to complete a real estate purchase beyond the price itself. They include lender fees, title insurance, recording fees, prepaid taxes and insurance, and escrow or settlement charges, split between buyer and seller by contract and local custom.

Earnest money can help cover them. At closing the deposit is credited to the buyer, and that credit reduces the total cash due, which includes both the remaining down payment and the buyer's closing costs.

On a $500,000 home, a $10,000 deposit does not change what closing costs are, but it means $10,000 of the money you owe has already been paid. The earnest money calculator shows how the deposit applies, and does earnest money go toward closing costs answers the common question.