Closing Cost Calculator

Our closing cost calculator for buyers consists of several fields to help you determine your total closing costs when you close on your loan. It includes everything a lender might charge, including an appraisal, tax services, insurance and so forth, to help you determine how much to save to purchase a home. Let’s take a look at the different fields you’ll need to complete to help accurately calculate your closing costs.

Loan Info

Your loan information includes important details about your loan that are necessary to calculate closing costs since they’re largely based on the total loan value.

• Purchase price: The purchase price is the amount you purchase the home for, including your loan amount and down payment.
• Down payment: Your down payment is how much you put down on the home out of pocket and doesn’t include the loan amount.
• Term (years): The term is the length of your loan.
• Interest rate: The interest rate is the cost of borrowing money from a bank, lender, or other financial institution and affects how much you’ll pay over the life of your loan.

Taxes & Insurance

Property tax and homeowners insurance are prepaid expenses that are paid at closing. After paying them at closing, they become yearly costs either rolled into your mortgage payments or paid separately.

• Property tax (yearly): Property taxes are paid at the local level to support community initiatives like schools, police and fire departments, roads, construction and so forth.
• Homeowners insurance (yearly): Homeowners insurance protects the homeowner and lender by ensuring the home is covered in case of damage, natural disaster or theft.

Origination Fees

Your lender puts in a lot of behind-the-scenes work when originating your loan, including reviewing your application and underwriting. Origination fees cover these services.

• Origination charge: The origination charge is the total sum of the charges from originating the loan.
• Discount points: Borrowers can purchase discount points to reduce their mortgage rates. These points are paid for at the time of closing.

Other Settlement Services

• Appraisal: Most lenders require an appraisal of the property to ensure the borrower isn’t paying more than the property is worth, ultimately protecting their investment. Borrowers are responsible for paying the appraisal fee at the time of closing.
• Credit report: When lenders review your loan application, they run a credit report to check your credit history and ensure you repay your debts on time.
• Flood certification: A flood certification certifies if a property is located in a flood zone. If it is, lenders may require a homeowner to get flood insurance to protect their investment.
• Tax service: Tax service fees ensure the borrower pays their property taxes, and lenders hire tax service agencies to research the property and its taxes.
• Title services: When you take out a home loan, the lender performs a title search to look for potential issues like liens to ensure the seller actually owns the property. A title search and insurance are required for lenders to protect their investments, and the associated costs are passed to the borrower.
• Government recording fees: Recording fees are required to transfer ownership of a property with the local governments.
• Transfer taxes: Transfer taxes are a one-time fee at the local level that allows the property to change ownership.
• Survey: Property surveys reveal details about the home to prevent legal issues by helping borrowers understand the property boundaries and easements.
• Pest inspection: Your lender may order a pest inspection because damage from pests like termites can reduce the value of the home and the total loan amount.

Using a closing cost calculator estimator can help you understand the total cost of becoming a homeowner. Most people only consider the down payment as an upfront cost, but closing costs are due before you can sign the final paperwork and become a homeowner. If you can’t afford closing costs, lenders will reduce your loan amount to ensure you can cover all of your costs.

Closing costs are crucial for building a better budget for purchasing a home. Without knowing how much your upfront costs will be, you can’t determine how much you’ll need to save before applying for a loan. The less you have saved for the down payment and closing costs, the lower your loan amount might be.

Your closing costs don’t factor into your monthly mortgage payment because they’re one-time fees. However, if you want to know how much you’ll pay every month as a homeowner, you can use our mortgage payment calculator.

Meanwhile, if you’re just wondering whether or not you can afford a home without factoring in closing costs, you can try our home affordability calculator and then determine how much home you can afford and what your closing costs might be based on those calculations.

In most cases, you cannot roll closing costs into your mortgage loan amount, as lenders typically require these fees to be paid upfront at closing. However, some loan programs like VA loans allow you to finance certain closing costs, and you may be able to get a slightly higher loan amount to cover costs if you have sufficient equity or meet specific program requirements.

You pay closing costs at the closing table when you finalize your home purchase and sign all the mortgage documents. You’ll typically need to bring a cashier’s check or arrange a wire transfer for the exact amount, which you’ll know in advance from your Closing Disclosure document that you receive at least three days before closing.

Sellers typically pay different closing costs than buyers, including real estate agent commissions, title insurance for the buyer, transfer taxes and any agreed-upon buyer closing cost assistance.

Refinance closing costs are generally lower than purchase closing costs, but they still typically range from 2% to 5% of your loan amount. You won’t pay for services like property surveys or pest inspections, but you’ll still need an appraisal, title search and various lender fees.