Closing Cost Calculator 2021

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Our closing costs calculator determines your total closing costs when you purchase a home. Closing costs will include all the expenses such as lender fees & third-party fees which will help you estimate the total funds that will be required at closing. Closing costs range from 2% to 5% of the loan amount, however, they can vary significantly as there are several expenses that you can shop around for and get a better deal, along with the fixed costs which do not change.

$
Down Payment
$
%
Variable Costs
$9,425
Services you can Shop for (Negotiable)
+
Fixed Costs
$2,053
Services where the cost does not change
=
Total Costs
$11,478
This is 3.59% of your loan value which is $320,000
Total Amount Required at Closing
11,478 + 80,000 = $91,478

What are closing costs?

Closing costs are the total fees that are paid for the services required when you purchase a new home or refinance your existing home. Closing costs are usually paid by the buyer of the home, but the seller pays some closing costs in the form of real-estate commission.

Closing costs will include expenses such as property-related charges, lender fees, insurance costs and any other costs that are incurred to finalize the mortgage. Some of these expenses are fixed such that they are the same for anyone buying a similar valued home, for example, property taxes. On the other hand, some of the expenses you can shop around for and get a lower fee, for example, home inspection fee or lawyer costs.

When you apply for the mortgage, your lender is required to provide you the Loan Estimate document which will include an outline of the closing costs. Once the mortgage is approved and the deal has gone through, a few days before the settlement date, the lender will give you the Closing Disclosure document which will show all the closing costs that will have to be paid.

How much are closing costs?

Closing costs are different for all home buyers as they are dependent on the price of the home, location, and other fees. All these factors make it very difficult to accurately determine closing costs, however, the average total closing costs for most buyers is 2% to 5% of the loan amount. For example, on a $400,000 loan, you can expect closing costs to be anywhere from $8,000 to $20,000. This range is very large and may not be useful. Therefore, our closing cost calculator can provide a much closer estimate as our calculator determines the individual costs based on your specific situation.

The best way to pay closing costs is upfront as most of the costs are a one-time expense and are not recurring through the mortgage. If the lender permits, you can also choose to pay the closing costs by financing it into the mortgage amount, however, this is not advisable as you will be paying interest on these costs. Several states have first-time home buyer programs that can assist you with closing costs and meet minimum down payment requirements.

Who pays closing costs?

Closing costs are in most cases paid by the buyer of the house. There are situations where the seller covers some of the closing costs if it is a buyer’s market and the negotiations lead to closing costs being divided. If it is a buyer’s market where there are excess sellers and fewer buyers or if the seller is in a rush to sell, closing costs can be used as a bargaining chip by the seller in order to make the sale go through. In these situations, the seller might agree to pay some of the closing costs, known as seller-paid closing costs.

How to calculate closing costs?

Closing costs calculations are simple. You first estimate the amount for various costs required during closing and you sum them up to determine your total closing costs. If you have the actual values, you can then use those to determine the exact amount that will be required.

Example

For example, how much are closing costs on a house with a price of $400,000 with an $80,000 down payment in New York?

Negotiable Fees: Services you can Shop for

  1. Home Inspection Fee - $450
  2. Application Fee - $350
  3. Credit Report Fee - $25
  4. Lawyer Fee - $1000
  5. Loan Origination Fee – $4,000 (0.1% of Loan Value)
  6. Discount Points – $0
  7. Title Insurance - $2,000 (0.5% of Home Price)
  8. Homeowners Insurance – $1,600
  9. Title Search Fee - $600
  10. Upfront Mortgage Insurance Premium (MIP) - $0
  11. FHA, VA & USDA Loan Fees - $0

Total Services you can shop for = $8,425

Fixed Fees: Services where the cost does not change

  1. Appraisal Fee - $350
  2. Prepaid Interest – $448 (0.14% of Loan Value)
  3. Property Tax – $1,127 (1.69% tax rate for New York)
  4. HOA Fees – $400

Total Fixed Costs = $3,925

Closing Costs as a percentage of Loan Value = 3.85% ($12,350/$320,000 *100)

Total Closing Costs = $12,350

Total Amount required at closing = $92,350 ($12,350 + $80,000)

What is included in closing costs?

Closing costs can be divided into four main cost segments each having its own subset of fees. Some of the fees are fixed, such that their cost does not change from situation to situation, whereas, a majority of the fees are variable, which means you can shop around different providers to get the lowest cost offer.

Closing Costs Summary Table

Specific Fee or ExpenseFixed or Variable
Property-related FeesAppraisal FeeFixed
Home Inspection FeeShop
Title SearchShop
Title InsuranceShop
Mortgage-related FeesCredit Report FeeShop
Application FeeShop
Loan Origination FeeShop
Legal FeeShop
Discount PointsShop
Prepaid InterestFixed
Mortgage Insurance FeesUpfront Mortgage InsuranceShop
FHA, VA & USDA Loan FeesShop
Annual FeesProperty TaxesFixed
Homeowners InsuranceShop
HOA FeesFixed

Mortgage Insurance Fee

  1. Upfront Mortgage Insurance – If the down payment is less than 20% of the home value, then the lender will require you to get private mortgage insurance (PMI). PMI can be financed into the mortgage, or it can be paid upfront.
  2. FHA, VA & USDA Fees – Government-backed loans have initial costs that have to be paid. FHA loans require FHA Mortgage Insurance Premium (MIP) which is 1.75% of the loan amount. VA loans have the VA funding fee and USDA loans have guarantee fees.

Annual Fees

  1. Property Taxes – You will be required to pay two months of property taxes. The property rate will be dependent on your location.
  2. Homeowners Insurance – Lenders will require you to get insurance against potential damages. In most cases, 12 months of insurance is paid upfront, our calculator assumes a cost of 0.4% of the home price.
  3. Homeowners Association (HOA) – Some condominium associations have fees for maintenance and improving the public condominium property and amenities.

How do I reduce my closing costs?

Closing costs are an important cost in the process of buying a home and getting a mortgage. There are a few costs that are fixed, but a majority of them are variable where shopping around can get you a better deal. One of the largest closing costs is lender fees, especially origination charges, which can be close to 1% of the loan amount. This is where you can really try to save money. By shopping around for different lenders and with proper negotiations, these fees can be brought down significantly. There are a host of other variable fees where proper research and negotiation can save you a lot of money.