This is what a real closing disclosure looks like, fee by fee, with the math worked out so you can compare it to yours.
Reading a closing disclosure becomes much easier once you have seen one walked through with actual numbers. This example uses a hypothetical $350,000 home purchase in a state with a 1.0% transfer tax rate. The numbers are realistic and representative of what a conventional 30-year fixed mortgage looks like in today's market.
Purchase price: $350,000. Down payment: $35,000 (10%). Loan amount: $315,000. Loan type: 30-year fixed conventional. Interest rate: 7.0%. Closing date: the 22nd of the month. State transfer tax: 1.0%.
Loan Terms box:
Projected Payments box:
The escrow estimate of $480 breaks down to roughly $350 in property tax (assuming $4,200 annual property tax on a $350K home, which is typical at a 1.2% effective rate) and $130 in homeowners insurance.
Costs at Closing box:
Section A: Origination Charges
A 1% origination fee on a $315,000 loan is $3,150. This is on the higher end. Some lenders charge 0.5% or no origination fee at all, using yield spread premium instead. The $395 application fee is separately itemized, which is unusual. Some lenders bundle this into the origination fee.
Section B: Services Borrower Did Not Shop For
Appraisal fees in this range ($475 to $650) are typical for a single-family home. Higher fees ($700 to $1,200) are common for unique properties, rural areas, or rush orders.
Section C: Services Borrower Did Shop For
The lender's title insurance premium varies dramatically by state. A $625 lender's policy on a $315K loan is reasonable. Settlement agent fees range from $300 to $700 depending on the market.
Section D: Total Loan Costs (A + B + C) = $7,290
Section E: Taxes and Other Government Fees
Transfer tax varies wildly by state. California has no statewide transfer tax but cities and counties charge their own. New York can hit 1.4% to 2.5% depending on price and location. Florida is 0.7%. In our example, 1.0% on $350,000 generates $3,500 — one of the largest single line items on the entire closing disclosure.
Section F: Prepaids
Prepaid interest is calculated as (loan amount × annual rate) / 365 × days remaining in month. For a $315,000 loan at 7.0%: ($315,000 × 0.07) / 365 = $60.41/day × 9 days (22nd through 30th) = $543.70. Closing later in the month means less prepaid interest, which reduces cash to close.
Section G: Initial Escrow Payment at Closing
Lenders are allowed to collect up to two months of escrow items as a cushion at closing. The numbers above reflect that legal maximum.
Section H: Other
Owner's title insurance is optional, but most lenders strongly recommend it. The premium varies by state and by purchase price. On a $350,000 home, $1,400 is typical.
Section I: Total Other Costs (E + F + G + H) = $8,145
Section J: Total Closing Costs = $15,435
In our example, the lender provided a $200 lender credit, bringing the final closing costs charged to the buyer to $11,400. This number on page 1 differs from Section J because lender credits and seller credits are netted against the total.
The calculation:
The Total Interest Percentage of 139.86% means the buyer will pay $1.40 in interest for every dollar borrowed over the life of the loan. This number is normal for a 30-year mortgage.
A typical $350,000 purchase generates roughly $11,000 to $16,000 in closing costs before any lender credits or seller concessions. The largest single items are typically: transfer tax ($0 to $7,000 depending on state), origination fees ($2,000 to $5,000), owner's title insurance ($800 to $2,500 if you opt in), prepaid interest ($0 to $1,500 depending on closing date), and title services ($1,200 to $2,500).
The fastest way to reduce your closing costs is to negotiate the origination fee (sometimes possible with multiple lender offers), close earlier in the month to reduce prepaid interest, shop for title insurance and settlement services where allowed, and skip the optional owner's title insurance only if you understand the risk.
If you want to see your own closing disclosure walked through this way, ClosingDisclosureClarity prepares a full breakdown report with your actual numbers, benchmarked against typical ranges for your state and loan type. The report identifies any fee that is outside the typical range, flags potential errors or overcharges, and gives you a list of questions to raise with your lender before closing. $197, same-day turnaround.
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