When do I pay closing costs?

Early estimates: before you're under contract

Before closing costs become a firm number, you'll receive estimates at several points:

• Loan Estimate: within three business days of submitting your loan application, your lender is required to provide a Loan Estimate listing expected fees. This is a standardized document, not a final bill, but it gives you a real working picture.
• Seller's net sheet: sellers can request an estimated breakdown of expected proceeds from their agent before going under contract.

Use these early estimates to plan, but know that the final numbers will be confirmed later.

During the contract period

After you're under contract, your costs may shift based on what's negotiated, including seller concessions, lender credits, inspection-related adjustments, or other contract changes. Any agreed-upon modifications will be reflected in your final closing documents.

The Closing Disclosure

At least three business days before closing, buyers receive the Closing Disclosure, a detailed, finalized breakdown of every fee and credit in the transaction. This is the document to review carefully.

Compare it against your original Loan Estimate. Significant differences in certain fee categories may indicate an issue worth addressing before you sign. Ask your lender or closing professional to explain anything that's unclear.

At closing

Closing costs are paid at the closing table, or sometimes the day before, depending on how the transaction is structured. Payment is typically made by wire transfer or cashier's check in the exact amount specified by the closing attorney, title company, or settlement agent handling your transaction.

Wire fraud warning

Before sending any funds, independently verify the wiring instructions directly with the closing attorney or title company using a trusted phone number you looked up yourself, not one from an email. Wire fraud targeting real estate closings is real, and the funds are often unrecoverable once transferred. When in doubt, call and confirm.

Alabama and Tennessee closing logistics

Closing practices and logistics can vary by location and transaction. Your closing attorney, title company, lender, or other transaction professional will provide the specific instructions for your closing. Follow their guidance and don't hesitate to ask questions before you transfer any funds.