Closing Costs Estimator

Lender fees pay your mortgage lender to originate the loan: origination/underwriting (typically 0.5–1.5% of the loan), the appraisal ($500–$800), and a credit report pull ($50–$100). On a $400K loan with 1% origination, that's roughly $4,000–$5,000.

Title and escrow fees pay the title company to research the chain of ownership, issue title insurance, handle the settlement, and record documents. Lender's title insurance protects the bank (required) and runs ~0.4% of the loan. Owner's title insurance protects you (optional but strongly recommended) and runs ~0.5% of the price. Skipping owner's coverage to save $1,500 on a $300K home is the classic penny-wise mistake when an old lien surfaces 3 years later.

Government recording and transfer taxes vary wildly by state. New York charges a mortgage recording tax of ~1.8% on top of transfer tax. Pennsylvania and Maryland both have ~1% transfer taxes split between buyer and seller. California, Alaska, and a handful of other states have no state-level transfer tax. Check your county's recorder website for the current schedule before assuming the default.

Prepaid escrow items aren't really fees — they're future bills paid in advance. Lenders typically collect 2 months of property taxes, 12 months of homeowners insurance, and per-diem interest from closing day to the end of the month. These go into your escrow account, not the lender's pocket, but they still hit your cash-to-close.

Closing costs and cash to close are different numbers and getting them mixed up is one of the most common buyer mistakes. Closing costs are just the fees and prepaids: typically 2–5% of price. Cash to close is everything you wire to the title company on closing day: down payment + closing costs − seller credits − earnest money already in escrow.

On a $400K home with 20% down ($80K) and $12K of closing costs, your cash to close is $92K — not $12K. If you negotiated a $5K seller credit and put down $4K earnest money 30 days ago, your wire is $92K − $5K − $4K = $83K. Always work backward from the Closing Disclosure's bottom line, not the closing costs subtotal, when you confirm the wire amount with your bank.

Negotiate seller credits. In a balanced or buyer's market, asking for a 2–3% seller concession toward closing costs is standard. The seller pays it from their proceeds; you bring less cash. Conventional loans cap concessions at 3% (≤10% down) or 6% (>10% down); FHA caps at 6%; VA caps at 4% on most fees.

Shop the title company. Federal law lets the buyer choose the title company in most states, and rates vary by 20–40% between providers. Title insurance is regulated state by state, but settlement and title search fees are not. Get 2–3 quotes; the savings on a single transaction often pay for the phone calls 100x over.

Lender credits in exchange for a slightly higher rate. Taking a rate that's 0.125–0.25% higher can earn you a credit of 0.5–1% of the loan amount toward closing costs. Worth doing if you plan to refinance or sell within 5 years. Bad math if you'll keep the loan for 15+ years — the higher rate eventually overtakes the upfront savings.

Take a $400,000 purchase in a mid-tax state (Ohio, Texas, North Carolina), 20% down ($80,000), $320,000 loan at 7.0%. Lender side: 1% origination ($3,200), appraisal ($650), credit pull ($75), one-year of prepaid interest at closing on the 15th of the month (about $930). Lender subtotal: ~$4,855.

Title and escrow: lender's policy at 0.4% of loan ($1,280), owner's policy at 0.5% of price ($2,000), settlement fee ($550), survey ($400), recording ($120). Title subtotal: ~$4,350.

Government: deed transfer tax ~0.2% of price ($800). Prepaid escrow: 2 months of property tax at 1.1% annual ($733), 12 months of homeowners insurance ($1,400). Escrow subtotal: ~$2,133.

Total closing costs: roughly $12,138 — about 3.0% of the purchase price, a typical figure. Cash to close is $80,000 down + $12,138 = $92,138 wired to the title company on closing day. Negotiate a 2% seller credit ($8,000) and the wire drops to $84,138.