Closing costs are set fees that usually are third party fees, i.e. title insurance, escrow, credit report, appraisal, etc. Around $5,500 is normal. That would not include a loan origination fee, which is usually a percentage of the loan amount (normal is 1%) and discounts. Discounts points are charged when you want a lower interest rate than the lender's quoted rate. Taxes and insurance are considered prepaids since taxes are due in April and October and the insurance premium is paid annually. The lender collects these amounts on a monthly basis so it is easier on you for budgeting purposes so that when the time comes for these items to be paid, there would be funds in your escrow account for them to pay it for you.