Buying a Home
Understanding Closing Costs
Published 2026-07-31 · Last reviewed 2026-07-31 · Reviewed by Jim Lyddon, NMLS #2573609
Closing costs are the fees and prepaid items required to complete a mortgage transaction. They generally fall into lender charges, third-party services, title and escrow charges, government recording and taxes, and prepaid escrow items such as property taxes and homeowners insurance.
What to know
- Lender fees, which vary and can be compared between options.
- Third-party services such as appraisal and credit reporting.
- Title and escrow charges, and in Arizona escrow practice is standard on most transactions.
- Prepaid items: taxes, insurance and interest, which are costs you would pay anyway.
- Seller or lender credits can offset some costs, subject to program limits.
How Jim approaches this
Bring your specific numbers. General education gets you oriented, but the decision only becomes clear when it is run against your income, your cash position, the property you are considering and how long you plan to keep the loan. That conversation is free and does not require an application.
The information on this website is provided for general education only and does not constitute financial, tax or legal advice. Loan programs, guidelines and availability are subject to change and to borrower and property qualification.
JHL Mortgage, Inc. is an Equal Housing Opportunity lender. We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.