About this calculator
Closing costs are the fees, taxes, and prepaid items you pay at the close of a home purchase or refinance — separate from the down payment. They typically run 2–5% of the home price and often surprise first-time buyers who only budgeted for the down payment. This calculator estimates each component so you know the true cash needed at closing.
The major buckets
- Lender fees (0.5–2% of loan) — origination, underwriting, processing. Most negotiable.
- Discount points (optional, 1% of loan per point) — prepaid interest that lowers your rate by ~0.25% per point. Pays off if you stay 4–7 years.
- Title and escrow ($1,500–$4,000) — title insurance, escrow agent fees, recording. Less negotiable but worth shopping.
- Appraisal and inspection ($500–$1,500) — lender-required appraisal plus optional inspection.
- Prepaids — first months of property tax and homeowners insurance into escrow. Not a "cost" exactly; you'd pay these anyway.
- State and recording taxes (varies wildly) — transfer taxes range from 0% in some states to 2%+ in NY, NJ, PA.
How to lower closing costs
Compare Loan Estimates (LEs) from at least three lenders — federal law requires lenders to issue one within 3 days of application. Lender fees can vary by thousands. Title insurance has more flexibility than buyers realize: in most states you can shop the title company independently. Discount points are usually a bad deal for shorter holding periods.
"No-cost" closings explained
A "no-cost" loan rolls closing costs into the rate (you pay them as a higher rate over time) or into the loan balance. Both options are fine for buyers low on cash, but neither is actually free — you pay more in interest over the loan life.