Understanding Closing Costs

When planning to buy a home or refinance in Seattle or elsewhere in Washington State, it’s important to account for closing costs, which are a standard part of every real estate transaction. Understanding these costs early helps you plan accurately and avoid last-minute surprises at the closing table.

Closing costs are expenses associated with completing a real estate transaction. They are typically allocated between buyer and seller based on the purchase contract, loan program, and local custom.

The Two Main Categories of Closing Costs

Property-Related Closing Costs

These costs are tied to the property and the transfer of ownership and typically include:

Title insurance
Escrow services
Recording fees
Transfer taxes (if applicable)
Homeowners insurance
Property taxes

Loan-Related Closing Costs

These costs are associated with originating and setting up the mortgage and may include:

Loan origination or processing fees
Discount points (optional fees paid to reduce the interest rate)
Appraisal
Credit report
Prepaid interest
Impound or escrow account setup
Mortgage insurance (if required by the loan program)

Closing Cost Overview

Category	Examples
Property-Related	Title insurance, escrow services, recording fees, transfer taxes (if applicable), property taxes, homeowners insurance
Loan-Related	Origination or processing fees, discount points (optional), appraisal, credit report, prepaid interest, impounds, mortgage insurance (if required)

The Loan Estimate (LE)

After you apply for a mortgage, you will receive a Loan Estimate (LE). This document provides an itemized breakdown of estimated loan terms and closing costs.

Certain fees are regulated and subject to tolerance limits, while others may change based on third-party services or timing. Your final costs are disclosed later on the Closing Disclosure (CD) before closing.

No Surprises at Closing

Before closing, we review any changes with you so you understand:

What has changed
Why it changed
How it affects your final numbers

Clear communication ahead of time helps ensure a smooth and predictable closing process.

Ready to Review Your Financing?

Request a personalized financing review based on current market conditions and your scenario. Prefer to talk it through?

Talk With a Seattle Mortgage Broker

If you would like to review your options, estimate payments, or better understand what makes sense for your situation, I’m happy to help.

Schedule a consultation here

Sam Kader

Owner, Mortgage Broker | NMLS #130505

Pacific Coast Financial LLC | NMLS #78982
1329 N 47th St #31045, Seattle, WA 98103
Office: 206-393-0684 | Cell: 408-605-5927
info@pacificcoastfin.com

Disclaimer: This content is for informational purposes only and is not a commitment to lend or an offer of credit. Loan programs, terms, and requirements are subject to change and may vary based on individual qualifications and property characteristics.