Published: 2026-10-12
When you buy a house with a mortgage, you generally pay the costs of getting the loan and transferring the property. The contract or state law can shift some of those costs to the seller.
That split is negotiated. It is not a national menu with a fixed dollar total. Use the closing cost calculator to sketch cash to close for your price and loan, then check the result against the Loan Estimate a lender actually gives you.
Who is expected to pay?
The Consumer Financial Protection Bureau (CFPB) puts the starting point in one sentence: when you buy a home, you generally pay the costs of that transaction. The seller may pay some of them, depending on the purchase contract or on state law.
Local custom is not a statute you can assume. In one market, sellers often pay for a piece of the title work. In another, buyers do. The contract assigns the bill. If the contract is silent, ask which items your state treats as the seller's.
Commissions, inspections you ordered, and transfer taxes follow the contract and local law. Only amounts the lender knows about, and only your share of some items, show up on the loan forms. The seller's column is a contract question as much as a lending question.
What do seller credits and lender credits actually do?
You can ask the seller for a credit toward your closing costs. The CFPB notes that the seller will usually want a higher price to cover that credit. You may not write a separate check for those fees. You still pay them, through the price and often through a larger loan.
A lender credit is also not free. The CFPB says the lender will typically increase the loan amount to cover the costs, or charge a higher interest rate in exchange for the credit. A "no closing cost" ad usually means one of those two trades. The credit should show up as a line that reduces cash to close, and the higher rate or higher balance should show up in the loan terms.
Credits have limits that depend on the loan program and the down payment. The lender, not this page, tells you the cap on your file. A credit larger than the costs it can cover does not become cash back to you.
Which fee categories show up on the forms?
The CFPB lists common closing charges: appraisal fees, tax service provider fees, title insurance, government taxes, and prepaid expenses. Prepaids include property taxes, homeowners insurance, and interest that accrues until your first payment is due.
Loan costs are what the lender and its required services charge to make the loan. Origination charges and the appraisal sit here. Some services, such as title insurance, can be shopped. Others cannot. Shopping the ones you may shop is one of the few ways to change a fee the county did not set.
Other costs transfer the property and set up escrow. Recording fees and transfer taxes are in this group. So are escrow deposits for taxes and insurance the servicer will pay later. Those deposits are your money, held for bills you would owe anyway.
Prepaids cover bills due at the start, including per-diem interest from closing to the end of the month and a homeowners insurance premium due at closing. They vary with the calendar and the coverage you buy, so two buyers with the same loan amount can bring different checks.
This page does not name a dollar total. Fees depend on the loan amount, the location, the insurer, and the contract. The closing cost calculator is a planning sketch. The lender's forms are the figures for your loan.
Where do you see the split in writing?
After you apply, the lender gives you a Loan Estimate of the costs for the loan you requested. Later you receive a Closing Disclosure, a five-page form with the loan terms, the projected payments, and the fees to get the mortgage. The lender must give you that form at least three business days before closing, so you can compare it with the Loan Estimate and ask questions first.
Costs on the Closing Disclosure are sorted into what the borrower pays, what the seller pays, and what others pay. Seller credits show up in the summaries that lead to cash to close. Compare each line with the Loan Estimate. If a fee grew, ask which bucket it sits in. Some charges cannot rise, some can rise only within a limit, and some can change when the loan or the property facts change.
A few loans skip this form. The CFPB says reverse mortgages receive a HUD-1 and a final Truth in Lending disclosure instead. A HELOC, a manufactured-housing loan not secured by real estate, or certain assistance-program loans may receive neither a HUD-1 nor a Closing Disclosure, though you should still get a Truth in Lending disclosure. A standard purchase mortgage uses the five-page Closing Disclosure.
The home buying process guide puts that three-day wait on the calendar. Down payment size changes both cash to close and whether mortgage insurance is required, which the down payment guide covers. Points paid at closing to lower the rate are a closing cost of their own. The points and APR guide shows how to compare them.
Sketch cash to close in the closing cost calculator, then match the categories to your Loan Estimate before you negotiate a seller credit.
For the monthly housing side of that same purchase, see The 28/36 Rule: How Much House Can You Afford?.
This article is educational and is not a loan offer or financial advice.
Sources
- Consumer Financial Protection Bureau, What fees or charges are paid when closing on a mortgage and who pays them? (last reviewed September 11, 2024): https://www.consumerfinance.gov/ask-cfpb/what-fees-or-charges-are-paid-when-closing-on-a-mortgage-and-who-pays-them-en-1845/
- Consumer Financial Protection Bureau, What is a Closing Disclosure? (page last modified September 6, 2024): https://www.consumerfinance.gov/ask-cfpb/what-is-a-closing-disclosure-en-1983/