Closing Costs Calculator
Estimate the closing costs for your home purchase. Typical closing costs range from 2-5% of the home price.
Closing Costs
Closing Cost Analysis: 3.56%
Your closing costs are within the typical 2-5% range for a purchase.
Total Cash to Close
Amount needed at closing
Loan Summary
Closing Cost Breakdown
Cost Summary
Who Pays What?
Buyer Costs
Seller Costs (Typical)
Compare Down Payment Scenarios
Closing Cost Tips
- Shop around: Compare Loan Estimates from at least 3 lenders within 45 days
- Negotiate fees: Origination, processing, and some third-party fees are negotiable
- Ask for credits: Sellers may pay some closing costs in a buyer's market
- Review the Loan Estimate: Compare it to the Closing Disclosure - fees shouldn't increase by more than 10%
- Close at month end: Fewer prepaid interest days means lower closing costs
Understanding Closing Costs
Closing costs are the fees and expenses you pay when finalizing a real estate transaction, beyond the purchase price of the property. These costs typically range from 2% to 5% of the home's purchase price and cover services, taxes, and fees required to complete the sale. Understanding and budgeting for closing costs is essential for homebuyers, as they can add thousands of dollars to the total amount needed at the closing table.
Key Closing Cost Terms
Loan Origination Fee
A fee charged by lenders to process and underwrite your mortgage application, typically 0.5% to 1% of the loan amount. This covers the lender's administrative costs for creating your loan and is often negotiable with your lender.
Title Search and Insurance
Title search verifies the seller has legal ownership and the right to sell the property. Title insurance protects the lender and/or buyer against any claims or legal disputes over property ownership. This is typically one of the largest closing costs.
Appraisal Fee
Cost for a professional appraisal to determine the fair market value of the property, typically $300 to $600. Lenders require this to ensure the property is worth the loan amount they're providing and to protect their investment.
Homeowners Insurance Premium
First year's premium for homeowners insurance, often required at closing. This protects the property against damage, theft, and liability. Lenders require proof of insurance before funding the loan to protect their collateral.
Property Taxes (Prepaid)
Prorated property taxes paid in advance at closing. Depending on when you close and the local tax schedule, you may need to pay several months of property taxes upfront. Lenders often collect these in an escrow account.
Attorney Fees
Legal fees for attorney representation during the closing process, required in some states. Attorneys review documents, conduct title searches, and ensure the transaction complies with state laws. Costs vary by state and complexity.
Discount Points
Optional upfront fees paid to lower your interest rate, with each point equal to 1% of the loan amount. Buying points can reduce your monthly payment but increases upfront costs. Makes sense if you plan to keep the loan long enough to recoup the cost.
Recording Fees
Fees charged by local government to record the property sale and new deed in public records. These vary by location but are typically a few hundred dollars. Recording protects your legal ownership and makes the transaction public record.
Typical Closing Costs Breakdown
Lender Fees
0.5% - 1.5% of loan- Loan origination fee (0.5% - 1%)
- Underwriting fee ($300 - $900)
- Processing fee ($300 - $500)
- Application fee ($0 - $500)
- Rate lock fee (varies)
Title and Escrow Fees
0.5% - 1% of purchase price- Title search ($200 - $400)
- Title insurance ($500 - $3,500, varies by price)
- Escrow fee ($500 - $2,000)
- Settlement fee ($300 - $600)
- Courier fees ($25 - $100)
Third-Party Services
$1,000 - $2,500- Home appraisal ($300 - $600)
- Home inspection ($300 - $500, usually paid before closing)
- Survey fee ($300 - $600)
- Pest inspection ($75 - $150)
- Credit report fee ($25 - $50)
Prepaid Costs and Reserves
Varies by property- Homeowners insurance (first year premium)
- Property taxes (2-6 months prepaid)
- Mortgage insurance premium (if applicable)
- HOA dues (prorated)
- Prepaid interest (from closing to month end)
Government Fees and Taxes
$200 - $2,000+- Recording fees ($100 - $300)
- Transfer taxes (0.01% - 2% of price, varies by state)
- City/county taxes (varies by location)
- Attorney fees ($500 - $1,500 in some states)
Buyer vs. Seller Closing Costs
Buyer Typically Pays
- Loan origination and processing fees
- Lender's title insurance policy
- Home appraisal and inspection
- Credit report fees
- Homeowners insurance (first year)
- Prepaid property taxes and HOA dues
- Recording fees for deed and mortgage
- Discount points (if buying down rate)
Seller Typically Pays
- Real estate agent commissions (5% - 6%)
- Owner's title insurance policy
- Transfer taxes and stamps (varies by state)
- Prorated property taxes (up to closing)
- HOA fees and special assessments
- Outstanding liens and judgments
- Seller concessions (if negotiated)
- Attorney fees (in some states)
Important Note About Seller Concessions
In a buyer's market or competitive negotiations, sellers may agree to pay some of the buyer's closing costs (seller concessions). Conventional loans typically allow up to 3% - 6% in concessions, FHA loans up to 6%, and VA loans up to 4%. These concessions reduce the buyer's out-of-pocket costs but may be reflected in a higher purchase price.
10 Ways to Reduce Closing Costs
Shop Around for Lenders
Compare loan estimates from at least 3-5 lenders. Origination fees, processing charges, and other lender fees can vary significantly. Even 0.25% savings on a $300,000 loan is $750 in your pocket.
Negotiate Seller Concessions
Ask the seller to pay part of your closing costs, especially in a buyer's market. Many sellers are willing to contribute 2% - 3% of the purchase price to close the deal faster.
Close at Month-End
Prepaid interest is charged from closing day to month-end. Closing on the 28th instead of the 1st can save hundreds in prepaid interest charges. Time your closing strategically.
Shop for Title Insurance
While lenders often recommend title companies, you can choose your own. Shop around for title insurance quotes - prices can vary by 20% - 30% between providers for the same coverage.
Ask About No-Closing-Cost Mortgages
Some lenders offer to cover closing costs in exchange for a slightly higher interest rate. This works if you plan to refinance or sell within 3-5 years, though you'll pay more interest over time.
Review the Loan Estimate Carefully
Scrutinize every fee on your loan estimate. Question any charges that seem high or unnecessary. Lenders may waive or reduce fees if you ask, especially to secure your business.
Consider Lower Down Payment Options
FHA, VA, and USDA loans often have lower closing costs than conventional loans. VA loans don't require appraisal fees or mortgage insurance, potentially saving thousands in closing and monthly costs.
Bundle Services
Use the same company for multiple services when possible. Some title companies offer discounts if they handle both the title search and insurance. Banks may waive fees for existing customers.
Skip Optional Services
Owner's title insurance and property surveys may be optional in some states. Discount points are also optional. Evaluate whether these services provide enough value to justify their cost in your situation.
Look for First-Time Buyer Programs
Many states and local governments offer down payment assistance and closing cost grants for first-time buyers. These programs can cover $1,000 - $10,000+ in closing costs with favorable terms.
Understanding Your Closing Disclosure
The Closing Disclosure is a 5-page document you receive at least 3 business days before closing. It provides final details about your mortgage loan and shows all costs associated with the transaction. Review it carefully and compare to your initial Loan Estimate.
Page 1: Loan Terms
- Loan amount
- Interest rate
- Monthly payment
- Prepayment penalty
- Balloon payment
Page 2: Closing Costs
- Loan costs breakdown
- Other costs itemized
- Lender credits
- Total closing costs
- Cash to close
Pages 3-5: Details
- Costs comparison table
- Payment calculations
- Other disclosures
- Contact information
- Loan calculations
Red Flags to Watch For
- • Interest rate changed: Compare to your rate lock agreement
- • Loan amount increased: Should match your expectations
- • Costs increased significantly: Most fees can't increase more than 10%
- • Unexpected fees: Question any charges not on the Loan Estimate
- • Cash to close differs: Should be within $100 of the estimate
State and Regional Variations
Closing costs vary significantly by state due to different regulations, tax structures, and local customs. Some states require attorney representation, while others use escrow companies. Transfer taxes range from $0 to over 2% of the purchase price.
Higher Cost States
High transfer taxes and attorney requirements increase costs in these areas
Lower Cost States
Lower taxes and streamlined processes keep costs down in these states
Key State Differences
- Attorney states: AL, CT, DE, DC, GA, MA, NC, ND, NH, NJ, NY, OH, PA, RI, SC, VT, VA, WV
- Escrow states: AK, AZ, CA, HI, ID, NV, NM, OR, WA
- High transfer tax: NY (0.4% - 2.625%), HI (up to 0.15%), DE (3% - 4%)
- No transfer tax: AK, ID, IN, LA, KS, MS, MO, MT, NM, ND, OR, TX, UT, WY
Common Closing Cost Mistakes
Not Budgeting Enough Cash
Many buyers focus only on the down payment and forget about closing costs. You need 2% - 5% additional for closing costs, plus moving expenses and immediate repairs. Running short at closing can derail your purchase. Always budget an extra cushion.
Not Comparing Lenders
Going with the first lender without shopping around can cost thousands. Origination fees alone can vary by 0.5% - 1%, which is $1,500 - $3,000 on a $300,000 loan. Get loan estimates from multiple lenders and negotiate.
Ignoring the Closing Disclosure
You receive the Closing Disclosure 3 days before closing for a reason - to review it. Many buyers glance at it or skip it entirely, missing errors or unexpected charges. Compare every line to your Loan Estimate and question discrepancies.
Not Negotiating Seller Concessions
Many buyers don't realize they can negotiate for the seller to pay closing costs. This is especially effective in buyer's markets or with motivated sellers. Even 2% concessions on a $300,000 home is $6,000 you don't have to bring to closing.
Waiving Important Inspections
Skipping home inspections to save $400 - $600 can cost tens of thousands in unexpected repairs. While inspections add to closing costs, they're essential for identifying problems before you own them. Never waive inspections unless you're an experienced investor.
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Frequently Asked Questions
How much should I budget for closing costs?
Budget 2% - 5% of the home's purchase price for closing costs. On a $300,000 home, expect $6,000 - $15,000. Costs vary by location, loan type, and whether you negotiate seller concessions. Always add a 10% - 20% buffer for unexpected expenses.
Can I roll closing costs into my mortgage?
Generally no - most lenders require closing costs paid upfront. However, you can get a no-closing-cost mortgage where the lender covers costs in exchange for a higher interest rate. You can also add closing costs to your loan amount if you're refinancing and have enough equity, or if the home appraises higher than the purchase price.
What's the difference between closing costs and down payment?
The down payment is the portion of the purchase price you pay upfront (typically 3% - 20%). Closing costs are separate fees for services, taxes, and insurance required to complete the transaction. Both are due at closing, so you need cash for both. On a $300,000 home with 10% down, you'd need $30,000 for down payment plus $6,000 - $15,000 for closing costs.
Are closing costs tax deductible?
Some closing costs are tax deductible, including mortgage interest, property taxes, and discount points (if you itemize deductions). Most other fees like appraisal, title insurance, and attorney fees are not deductible. Consult a tax professional for your specific situation, as tax laws change frequently.
Do I pay closing costs when selling a home?
Yes, sellers typically pay 6% - 10% of the sale price in closing costs, primarily real estate commissions (5% - 6%). Sellers also pay for title insurance, transfer taxes, attorney fees (in some states), prorated property taxes, and any negotiated buyer concessions. These costs are usually deducted from your proceeds at closing.
When do I receive the Closing Disclosure?
By law, lenders must provide the Closing Disclosure at least 3 business days before closing. This gives you time to review all costs and terms. If any numbers change significantly after you receive it, the 3-day clock may reset. Don't wait until the last minute - review it immediately and contact your lender with any questions.
Ready to Calculate Your Closing Costs?
Use our calculator above to estimate your total closing costs based on your home price, location, and loan details. Get a detailed breakdown of expected fees and plan your budget accordingly.
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