Closing Costs Calculator

About the Closing Costs Calculator

Closing costs are everything you pay at the closing table beyond the down payment. They typically run 2-5% of the home price — a $400,000 home means $8,000-20,000 in extra cash. This page breaks down what each line item is, who chooses the vendor, and which costs you can shop or negotiate.

The Formula

Total closing costs ≈ Home price × (2% to 5%). Buyer's share typically includes loan origination, appraisal, title insurance, escrow setup, recording fees, and prepaid taxes/insurance. Seller's share includes agent commissions and transfer taxes (varies by state).

Worked Example

$400,000 home: lender origination ($2,000-4,000), appraisal ($500-800), title insurance ($1,500-3,000), escrow/settlement ($500-1,000), recording fees ($100-300), prepaid property tax (3-6 months, ~$1,200-2,400), prepaid homeowners insurance (1 year, ~$1,000-1,500), HOA dues prorated. Total: roughly $7,000-13,000 for the buyer.

Costs you can shop for

Title insurance, escrow/settlement, and homeowners insurance are buyer's choice. Lender's title insurance is mandatory; owner's title insurance is optional but recommended. Always get 2-3 quotes — title insurance pricing varies more than people expect.

Costs you cannot shop for

Government recording fees, transfer taxes, and lender-specific origination fees. The Loan Estimate (LE) breaks these into 'cannot shop' vs 'can shop' categories specifically because of this.

Seller concessions

In buyer's markets, sellers may agree to credit a percentage of the price (usually capped at 3-6%) toward your closing costs. The home appraises and finances at the higher price; the cash flows back to you at closing. Useful if you're cash-tight but qualify for the higher loan amount.

Common Mistakes

• Budgeting only for the down payment and forgetting closing costs need separate cash.
• Accepting the lender's recommended title company without comparison.
• Confusing 'no-closing-cost' loans with 'no costs' — they roll fees into a higher rate or larger principal.
• Not bringing certified funds (cashier's check or wire). Personal checks are rarely accepted at closing.

Frequently Asked Questions

Are closing costs tax-deductible?
Mortgage interest and property taxes paid at closing are deductible (subject to limits). Most other closing costs are not — they're added to your cost basis.

Can closing costs be negotiated?
Origination and 'junk' fees often have wiggle room. Title insurance is regulated in some states. Always compare Loan Estimates from 2-3 lenders.

This calculator is for informational purposes only and does not constitute financial, tax, or legal advice. Consult a licensed professional before making significant financial decisions.