The money a buyer puts toward a down payment becomes instant equity (the portion of the
home’s value that you own) while closing costs cover fees and services for the work
performed by the lender, title agent, and to establish tax and insurance escrows.
The seller may cover some or all of these costs, or they become the responsibility
of the buyer. Your lender will estimate closing costs for you; however, exact numbers
are usually not determined until final loan approval, just before settlement.