Closing Costs Calculator
Estimate total closing costs for a real estate purchase including origination fees, appraisal, title insurance, recording fees, and transfer taxes.
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Visualization
How It Works
Closing costs are the fees and expenses you pay when finalizing a real estate purchase, beyond the down payment. They typically range from 2-5% of the purchase price and include lender fees, title services, government recording charges, transfer taxes, and prepaid items like insurance and property taxes.
The Formula
Variables
- Origination Fee — Lender charge for processing the loan — typically 0.5-1% of the loan amount
- Title Insurance — Protects lender and buyer against title defects — typically 0.5% of purchase price
- Transfer Tax — State or local tax on transferring property ownership — varies widely by location
- Recording Fee — County charge to officially record the deed and mortgage documents
- Prepaids — Upfront deposits for property taxes and homeowner's insurance held in escrow
Worked Example
You are buying a $350,000 property with a $262,500 loan. Origination fee = $2,625 (1% of loan). Appraisal = $500. Title insurance = $1,750 (0.5% of price). Recording = $250. Transfer tax = $1,750 (0.5% of price). Attorney = $750. Prepaids = $2,250. Other = $75. Total closing costs = approximately $9,950, or 2.84% of the purchase price.
Practical Tips
- Always request a Loan Estimate from your lender within 3 days of applying — it itemizes expected closing costs.
- Shop around for title insurance and attorney fees — these are negotiable and vary widely.
- Seller concessions can cover some closing costs — negotiate up to 3-6% of the price depending on loan type.
- Transfer taxes vary dramatically by state — some states charge 0%, others charge over 2%.
- Budget 3-5% of the purchase price for closing costs on top of your down payment.
Frequently Asked Questions
How much are typical closing costs?
Closing costs typically range from 2-5% of the purchase price. On a $350,000 home, expect $7,000-$17,500. The exact amount depends on your location, lender, and loan type.
Can closing costs be rolled into the loan?
Some lenders offer no-closing-cost mortgages, but the costs are built into a higher interest rate. You can also sometimes finance closing costs by borrowing more than the purchase price, up to loan limits.
Who pays closing costs — buyer or seller?
Both pay some costs. Buyers typically pay lender fees, title insurance, prepaids, and recording fees. Sellers usually pay the real estate commission (5-6%) and their share of transfer taxes. Costs can be negotiated.
What are prepaids at closing?
Prepaids are upfront deposits for recurring costs — typically 3-6 months of property taxes and 12 months of homeowner's insurance. The lender holds these in escrow to ensure they are paid on time.
Are closing costs tax deductible?
Some are. Mortgage points (prepaid interest), property taxes, and state/local taxes paid at closing may be deductible. Title insurance, appraisal fees, and recording fees are not deductible for primary residences but may be for investment properties.