Closing Cost Calculator

1 Loan Amount Calculation

First, we determine your loan amount, which is the basis for many fees.

• Loan Amount = Home Price - Down Payment Amount

2 Estimated Fee Breakdown

The total cost is the sum of three categories, each estimated as follows:

• Lender Fees (Estimate)

  These are fees charged by the bank to create the loan.

  Lender Fees = (Loan Amount * 0.75%) + $400 (Application) + $600 (Underwriting)
• Third-Party Fees (Estimate)

  Fees for services from other companies (appraisal, title, etc.). We also include state-based transfer tax estimates here.

  Third-Party Fees = $500 (Appraisal) + $35 (Credit) + (Loan Amount * 0.5%) (Title) + $800 (Attorney) + [State Tax]...
• Prepaids & Escrow (Estimate)

  This is money you pay upfront for future expenses, primarily property taxes and homeowner's insurance.

  Prepaids = $1200 (1yr Insurance) + (Estimated Annual Property Tax / 12 * 4 Months)

What Are Closing Costs?

Closing costs are a collection of fees you pay to finalize a real estate transaction. They are separate from your down payment and are typically paid at the closing meeting. These costs cover the services provided by your lender, real estate attorney, title company, and other third parties involved in the sale. As a general rule, you can expect closing costs to be between 2% and 5% of the loan amount. Our closing cost estimator helps you budget for this significant expense.

How to Use This Closing Cost Calculator

• 1
  Enter Loan Details: Input the home price, your down payment, and the loan term. This establishes the loan amount, which is the basis for many closing cost calculations.
• 2
  Select Your Location: Choose your state from the dropdown. This is crucial as some of the largest fees, like transfer taxes, are determined by state and local governments.
• 3
  Specify Transaction Type: Indicate whether you are purchasing a new home or refinancing. Refinance closing costs are often slightly lower as some fees (like home inspection) may not be required.
• 4
  Analyze Your Estimate: Review the total estimated cost and a detailed breakdown. Use this to understand where your money is going and to budget for the cash you'll need at closing.

Common Closing Costs Explained

Closing costs can be grouped into three main categories. Our closing cost calculator provides an estimate for each of these.

• Lender Fees: These are charges from your mortgage provider for creating the loan. This includes the origination fee, application fee, and points (if you choose to buy them to lower your rate).
• Third-Party Fees: Charges for services from other companies, such as the appraisal fee, title insurance, credit report fee, and attorney fees.
• Prepaids & Escrow: These are not fees, but upfront payments for ongoing expenses. This includes prepaying your first year of homeowner's insurance and funding your escrow account with several months of property taxes and insurance.

Strategies to Lower Your Closing Costs

While many closing costs are fixed, there are several ways you can potentially reduce your out-of-pocket expenses. A little negotiation and smart shopping can go a long way.

• Negotiate with the Seller: In a buyer's market, it's common to ask the seller to contribute a percentage of the purchase price toward your closing costs. This is known as a "seller concession."
• Shop Around for Services: You don't have to use the title company or homeowner's insurance provider your lender recommends. Compare quotes from different companies to find the best rates.
• Close at the End of the Month: One of your prepaid costs is the daily interest for the month you close. By closing on one of the last business days of the month, you minimize the number of days you have to pre-pay, slightly reducing your cash-to-close amount.
• Ask About No-Closing-Cost Mortgages: Some lenders offer loans where they cover the closing costs. Be aware, this isn't free money, you will typically pay a higher interest rate over the life of the loan in exchange.