Mortgages / Closing Cost Calculator
Closing Cost Calculator
Closing costs are the fees and expenses required to finalize a real estate transaction, whether you're buying or selling a home. Some fees are paid to your lender, and others to third parties, such as appraisers, inspectors, and title companies. Both buyers and sellers may be responsible for different portions of the closing costs. Use our calculator to estimate your closing costs.
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How much are closing costs?
Closing costs typically range between 2% to 5% of the home’s purchase price for buyers. For example, on a $400,000 home, closing costs might range from $8,000 to $20,000.
Seller closing costs are typically higher, and can reach 8% to 10% of the home’s sale price. Standard closing costs include the commission you’ve negotiated and agreed to with your agent to sell your home, plus an additional percentage of the sale (approximately 2% to 4%) in transfer taxes, property taxes, attorney fees, and other real estate fees.
The total closing cost amount can vary depending on several factors, such as:
- Loan type: FHA, VA, or conventional loans may have different fees.
- Location: Taxes and recording fees vary by state and/or county.
- Home price: A higher-priced home typically results in higher closing costs.
- Service providers: The cost of third-party servicers, such as appraisers and inspectors, can vary.
- Paying for discount points in exchange for a lower interest rate.
Who pays closing costs, the buyer or the seller?
Both buyers and sellers may pay closing costs. Typically, buyers cover the majority of these fees, including lender fees and prepaid expenses like insurance and property taxes. Sellers pay their own real estate agent commissions and may contribute to the buyer portion of agent fees, as well as other seller contributions as negotiated.
Buyers are generally responsible for:
- Loan origination fees
- Appraisal fee
- Home inspection fee
- Title insurance (lender’s policy)
- Attorney fees
- Homeowner’s insurance and prepaid costs
- Recording fees
Sellers usually cover:
- Transfer taxes (in some states or localities)
- Title insurance (owner’s policy)
- Escrow fees (split with the buyer in some cases)
- A portion of real estate brokerage fees (including commissions, which are negotiable between the parties and their respective agents).
Can closing costs be negotiated?
Yes, many closing costs are negotiable. You may be able to negotiate certain fees with your lender, such as origination fees, and shop around for services like title insurance or home appraisals. Additionally, sellers may agree to pay a portion of the buyer’s closing costs, known as “seller concessions,” which can help reduce your upfront expenses. However, some costs are non-negotiable, such as government fees, property taxes, and insurance premiums.
When do I pay closing costs?
Closing costs are typically paid at the end of the home-buying process, on the day you close on the property. In most cases, you’ll bring a cashier’s check or arrange a wire transfer to cover these costs at the closing table.
Are there specific closing costs for different type of loans (FHA, VA, Conventional)?
Yes, each loan type has unique closing costs. For example, FHA loans require an upfront mortgage insurance premium (MIP), while VA loans may include a funding fee. Conventional loans generally don’t have these fees, but costs can still vary depending on the lender. Learn more about mortgage-related closing costs.
Frequently asked questions about closing costs
- Can closing costs be included in the loan?
In some cases, yes. Buyers may have the option to roll closing costs into the loan, meaning the costs are added to the total mortgage amount, rather than paid upfront. This is often called financing closing costs, and while it reduces your immediate out-of-pocket expenses, it increases your loan balance and monthly payments. Including closing costs in the loan means you’ll pay interest on them for the life of the loan, ultimately costing more in the long run.
Another option is lender credits, where you pay a slightly higher interest rate in exchange for funds from your lender to cover closing costs. This can be appealing for buyers who can afford the monthly payment but lack cash for closing costs. The credit amount varies, so discuss it early when getting pre-approved.
- Are there closing costs for an all-cash purchase?
Yes, even when buying with cash, closing costs apply. These typically include title insurance, property taxes, inspection fees, and recording fees. Cash buyers avoid lender-related fees but should still plan for these additional expenses.
- Can I get a breakdown of my closing costs before I commit to the loan?
Yes, lenders are required to provide a loan estimate within three business days of receiving your completed application, which gives a breakdown of expected closing costs. Review this document carefully and compare it to the closing disclosure you’ll receive before closing, as costs can sometimes change slightly.
- What is typically the most expensive closing cost?
The most expensive closing cost is often the loan origination fee, which can range from 0.5% to 1% of the loan amount. The lender charges this fee for processing and underwriting the loan. On a $500,000 mortgage, this fee could be around $5,000.
However, in some areas, property taxes and title insurance can also be significant expenses, especially if property taxes are collected in advance for several months at closing. Comparing fees from multiple lenders can help identify cost-saving opportunities for these large expenses.
- Do I need to pay closing costs on a refinance?
Yes, refinancing a mortgage involves closing costs similar to those on a new home purchase. These can include appraisal fees, title insurance, and loan origination fees. Some lenders offer "no-closing-cost" refinancing, where they cover these fees but may charge a higher interest rate.
- What part of the country has the highest closing costs?
Washington, D.C. has the highest average closing cost in the country, followed by Delaware, New York, and Maryland.
Related Articles
What are common closing costs, and how much do they cost? Learn all about closing costs in our guide.
Learn what fees you can negotiate and what to expect early in the process to help create fewer surprises at closing.
VA closing costs: what fees will you pay?
Considering a VA loan for your new home? Read about what closing costs you may pay, and how much they cost.
