Mortgage Closing Cost Calculator

Understanding the Closing Cost Calculator

Closing costs are the collection of fees you must pay to complete a real estate transaction. They are separate from your down payment and can be a significant expense for homebuyers, typically ranging from 2% to 5% of the home's purchase price. This calculator provides a detailed estimate to help you budget for this expense and understand your total "cash to close."

How It Works

The calculator breaks down closing costs into three main categories based on your inputs:

• Lender Fees: This primarily includes the loan origination fee, which is a percentage of the loan amount charged by the lender for processing the loan.
• Third-Party Fees: These are fees for services provided by other companies, such as an appraisal to verify the home's value and title insurance to protect against ownership disputes.
• Prepaids: These are expenses you pay at closing before they are technically due. This includes prepaying for your homeowner's insurance policy and setting aside a portion of your annual property taxes in an escrow account.

Total Cash to Close

The final, most important number is your estimated "cash to close." This is the total amount of money you will need to bring on closing day. It is calculated as:

Cash to Close = Down Payment + Total Closing Costs

By understanding this breakdown, you can better prepare for the financial requirements of buying a home and avoid any surprises at the closing table.

Frequently Asked Questions