Closing Cost Calculator

Closing costs typically range from 2% to 5% of the loan amount. They include lender fees, third-party fees (appraisal, title, inspection), prepaid items (property taxes, homeowner's insurance), and state/local transfer taxes.

Both parties pay some closing costs. Buyers typically pay lender fees, title and escrow fees, and prepaid items. Sellers usually pay the real estate agent commission and transfer taxes. In some transactions, sellers offer credits to cover buyer closing costs.

In most cases, closing costs cannot be added to a conventional purchase mortgage. However, some programs (VA IRRRL, FHA Streamline) allow it for refinances. Some lenders offer 'no-closing-cost' loans that roll fees into a higher interest rate.

Prepaid items are upfront costs for future expenses: typically 1-3 months of homeowner's insurance, 2-3 months of property taxes for escrow setup, and prepaid interest from closing to the end of the month. These are not fees but deposits into your escrow account.

Title insurance protects you against past defects in the property's ownership history (unpaid liens, fraud, errors). Lenders require a lender's title policy. An owner's title policy protects your equity and is strongly recommended. It is a one-time premium paid at closing.

FHA loans require an upfront Mortgage Insurance Premium (MIP) of 1.75% of the loan amount, plus an annual MIP rolled into monthly payments. FHA loans also have an appraisal requirement that includes health and safety standards not required by conventional appraisals.