Closing Cost Calculator

Average Closing Costs in 2026:

Why Closing Costs Vary So Much:

1. Location: Transfer taxes range from 0% (many states) to 2.6% (Delaware on expensive homes)
2. Loan Type: FHA and VA loans have specific fees; conventional varies by lender
3. Negotiation: Many fees are negotiable or can be shifted between parties
4. Timing: Closing late in the month reduces prepaid interest

Breaking Down the 2-5% Buyer Range:

• 2% scenario: Competitive lenders, late-month closing, seller credits, low-tax state
• 3-4% scenario: Average transaction with typical lender fees
• 5% scenario: High-tax state, early-month closing, points purchased, high insurance area

Breaking Down the 6-10% Seller Range:

• 6% scenario: Reduced commission (flat fee or discount broker), low transfer tax state
• 8% scenario: Traditional 5-6% commission plus typical fees
• 10% scenario: High commission market, repairs/credits, high transfer tax state

Loan-Related Fees (Largest Category for Buyers):

On a $360,000 loan (80% of $450,000):

• Origination (0.75%): $2,700
• No discount points: $0
• Application: $400
• Underwriting: $600
• Credit report: $40
• Subtotal: $3,740

Third-Party Fees:

Third-party subtotal: $3,700-$9,200

Prepaid Items & Escrow (Due at Closing):

On a $450,000 home with 6.5% rate:

• Prepaid interest (15 days avg): $1,218
• Property tax escrow (3 months at 1.1%): $1,238
• Insurance (12 months at $2,400/yr): $2,400
• Prepaid subtotal: $4,856

Use our Property Tax Calculator to estimate your specific property tax burden.

Agent Commissions (Largest Seller Expense):

The biggest change in 2026: Following the NAR settlement, commission structures have shifted:

2026 Reality: Many sellers now negotiate 4.5-5% total commission, saving $4,500-$6,750 on a $450,000 sale.

Title & Settlement Fees (Seller):

Government Fees & Taxes:

High Transfer Tax States (2026):

• Delaware: Up to 2.6% (highest)
• Pennsylvania: 2% (state) + local
• New York: 0.4-0.65% + mansion tax
• Washington DC: 1.1-1.45%
• Maryland: 0.5-1%

No Transfer Tax States:

• Alaska, Idaho, Indiana, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, Texas, Utah, Wyoming

Use our Seller Net Sheet Calculator to calculate your exact proceeds after all costs.

Other Seller Costs:

What is Transfer Tax? Transfer tax (also called documentary stamp tax, deed tax, or conveyance tax) is a fee charged by state, county, or municipal governments when real estate changes hands. It's typically calculated as a percentage of the sale price.

States with Highest Transfer Taxes:

States with No or Minimal Transfer Tax: Alaska, Idaho, Indiana, Kansas, Louisiana, Mississippi, Missouri, Montana, New Mexico, North Dakota, Oregon, South Dakota, Texas, Utah, Wyoming

Important Nuances:

1. Local Additions: Cities and counties often add their own transfer taxes
2. Mansion Taxes: NY, NJ, CA add extra taxes on expensive properties
3. Exemptions: First-time buyers, veterans, or seniors may qualify for exemptions
4. Negotiability: Which party pays is often negotiable

Example: $450,000 Home in Key States

• Texas: $0 transfer tax
• Florida: $2,700 (seller pays)
• California: ~$500-$2,000 (varies by county)
• New York: $1,800 seller + mansion tax if over $1M
• Pennsylvania: ~$9,000 (split)

For Buyers - Save $2,000-$10,000:

1. Shop Multiple Lenders (Saves: $1,000-3,000)

   • Get Loan Estimates from 3-5 lenders on the same day
   • Compare APR, not just interest rate
   • Negotiate - lenders have flexibility on fees
   • Use our Mortgage Calculator to compare scenarios

2. Ask for Seller Credits (Saves: $2,000-10,000)

   • Common in buyer's markets
   • Seller pays portion of your closing costs
   • Increases your loan amount slightly
   • Preserves your cash

3. Close Late in the Month (Saves: $500-2,000)

   • Prepaid interest is calculated daily
   • Closing on the 28th vs. the 5th saves ~23 days of interest
   • On $360,000 loan at 6.5%: Saves ~$1,500

4. Decline Optional Services (Saves: $200-500)

   • Rate lock extensions (plan timing carefully)
   • Some lender add-ons

5. Use Lender Credits (Trade-off)

   • Accept 0.25% higher rate for $2,000-4,000 credit
   • Good if selling/refinancing within 5-7 years

6. Ask About First-Time Buyer Programs

   • Down payment assistance often includes closing cost help
   • State and local programs vary

For Sellers - Save $5,000-20,000:

1. Negotiate Commission (Saves: $4,500-13,500)

   • 5% instead of 6% saves $4,500 on $450,000
   • Discount brokers offer 1-2% listing fees
   • FSBO saves listing commission entirely

2. Time Your Sale (Saves: Property Tax)

   • Selling early in tax year = less prorated tax to credit

3. Get Multiple Title Quotes (Saves: $300-800)

   • Title companies compete on price
   • Buyer usually chooses, but you can negotiate

4. Limit Repair Credits (Saves: Varies)

   • Sell "as-is" in hot markets
   • Get pre-listing inspection to avoid surprises
   • Use our Home Value Estimator to price correctly

Traditionally Paid by Buyer:

• Loan origination and related fees
• Appraisal
• Home inspection
• Lender's title insurance
• Prepaid items (taxes, insurance, interest)
• Owner's title insurance (varies by state)

Traditionally Paid by Seller:

• Real estate agent commissions
• Transfer taxes (varies by state)
• Title search (varies)
• Settlement fee (varies)
• Prorated property taxes
• HOA transfer fees
• Any agreed-upon credits or repairs

Negotiable Between Parties:

• Owner's title insurance (custom: seller in most states, buyer in some)
• Settlement/escrow fees (often split)
• Survey costs
• Home warranty

Important: Everything is Negotiable

In real estate, "typical" doesn't mean "required." Here's how negotiations often play out:

Buyer's Market (High Inventory):

• Sellers more likely to offer closing cost credits
• Sellers may pay for buyer's title insurance
• Buyers can ask for repair credits
• Commission may be negotiable

Seller's Market (Low Inventory):

• Buyers may offer to pay seller's costs
• Fewer credits or concessions
• "As-is" sales more common
• Buyers may waive contingencies

The 3% Rule: Conventional loans allow sellers to contribute up to 3% of the purchase price toward buyer closing costs (6% with 10-25% down, 9% with 25%+ down). FHA allows 6%, VA allows 4%.

Strategic Use: If you're buying and short on cash, you might offer $5,000 over list price and ask for $5,000 in seller credits. Same net to seller, but you finance closing costs instead of paying cash.

Can You Finance Closing Costs?

Yes, there are several ways to avoid paying closing costs out of pocket:

1. Roll Into Mortgage (No Cash Upfront)

Some closing costs can be added to your loan balance:

• Lender fees (in some cases)
• PMI (can be financed in some programs)
• Some prepaid items

Trade-off: Higher loan amount = higher monthly payment

2. Lender Credits (Higher Rate)

Example on $360,000 loan:

• 6.5% with $3,500 closing cost credit
• vs. 6.25% paying $3,500 yourself
• Monthly difference: $60
• Break-even: 58 months

3. No-Closing-Cost Loans

Some lenders offer "no closing cost" options:

• Usually means higher interest rate (0.25-0.5% more)
• Or closing costs added to loan balance
• Not truly "free" - just deferred

4. Seller Credits (Cash from Seller)

• Seller agrees to credit you at closing
• Reduces your cash needed
• Subject to loan program limits
• May require higher offer price

5. Down Payment Assistance Programs

Many programs include closing cost assistance:

• State housing finance agencies
• City/county programs
• Employer assistance
• Nonprofit organizations

6. Gift Funds

Family can gift money for closing costs:

• Conventional: Allowed with documentation
• FHA: Must be from family member or approved source
• Requires gift letter stating no repayment expected

Considering your options? Our Rent vs Buy Calculator can help you decide if now is the right time to purchase.

What is Title Insurance?

Title insurance protects against losses from defects in title to property - things like:

• Unknown liens or encumbrances
• Errors in public records
• Undisclosed heirs claiming ownership
• Forged documents
• Boundary disputes

Two Types of Title Insurance:

*In many states, seller traditionally pays for owner's policy. In others (like Texas), buyer pays.

Why You Need Owner's Title Insurance:

The lender's policy only protects the lender. If a title defect emerges:

• Lender's policy: Bank gets paid, you still lose the house
• Owner's policy: You're compensated for your loss

One-Time Premium: Unlike other insurance, title insurance is a single payment at closing that protects you for as long as you own the property.

2026 Title Insurance Costs by Home Value:

Saving on Title Insurance:

1. Compare quotes - Title insurance isn't standardized pricing
2. Ask about simultaneous issue discount - Buying both policies together often costs less
3. Check for reissue rates - If seller bought title insurance recently, you may qualify for discount
4. Negotiate - In competitive markets, ask seller to pay

Typical 30-45 Day Closing Timeline:

Days 1-3: Offer Accepted

• Sign purchase agreement
• Submit earnest money (1-3% of price) to escrow
• Begin loan application

Days 3-7: Loan Application

• Receive Loan Estimate within 3 business days
• Compare with other lenders (can still shop)
• Order home inspection ($300-500)

Days 7-14: Inspections & Appraisal

• Home inspection completed
• Negotiate repairs/credits if needed
• Lender orders appraisal ($400-700)
• Appraisal completed

Days 14-21: Underwriting

• Loan in underwriting
• Respond to requests for documentation
• Title search completed
• Survey ordered if required

Days 21-28: Conditional Approval

• Receive conditional loan approval
• Clear any conditions (more docs, explanations)
• Review title commitment
• Obtain homeowners insurance

Days 28-30: Clear to Close

• Final loan approval
• Receive Closing Disclosure (must be 3 days before closing)
• Review all fees - compare to Loan Estimate
• Schedule closing

Closing Day:

• Final walkthrough of property
• Sign documents (1-2 hours)
• Wire funds or bring cashier's check
• Receive keys!

Post-Closing (1-3 Days):

• Deed recorded with county
• You officially own the home

Cash Needed at Closing:

• Down payment
• Closing costs (minus any credits)
• Prepaid items
• Earnest money credit (already paid)

Pro Tip: The Closing Disclosure must match your Loan Estimate within tolerance limits. Any unexpected fee increases may violate TRID regulations - ask your lender to explain.

Mistake #1: Not Getting Multiple Loan Estimates

Many buyers only get one quote. Lender fees can vary by $2,000-5,000 for the same loan.

Fix: Get at least 3 Loan Estimates on the same day, compare Section A (Origination Charges) carefully.

Mistake #2: Ignoring the Closing Disclosure

You receive the Closing Disclosure 3 days before closing. Many buyers just sign without reviewing.

Fix: Compare every line to your Loan Estimate. Question any increase over 10% in variable fees.

Mistake #3: Not Negotiating

Everything from lender fees to title insurance to agent commission is negotiable.

Fix: Ask "Is there any flexibility on this fee?" on any line item over $200. The worst they can say is no.

Mistake #4: Closing Early in the Month

Prepaid interest is charged from closing date to month end.

Fix: Close on the 25th-30th instead of the 1st-10th. On a $400,000 loan at 6.5%, this can save $1,500+.

Mistake #5: Forgetting Cash Reserves

Lenders want to see 2-6 months of reserves after closing.

Fix: Don't drain your accounts for maximum down payment. Keep reserves available.

Mistake #6: Making Large Purchases Before Closing

New credit inquiries or increased debt can derail your approval.

Fix: No new credit cards, car loans, or large purchases until after closing.

Mistake #7: Not Understanding Escrow

Many buyers are surprised by the initial escrow deposit.

Fix: Budget for 2-6 months of property tax and insurance deposits at closing.

Mistake #8: Assuming Seller Always Pays Transfer Tax

This varies by state and is negotiable.

Fix: Check your state's custom and negotiate in your offer.

Conventional Loans:

Conventional loans generally have the most flexibility in fee negotiation.

FHA Loans:

On $350,000 FHA loan: UFMIP adds $6,125 to closing costs. This can be financed into the loan.

VA Loans:

VA Funding Fee Breakdown:

• First-time use, 5%+ down: 1.25%
• First-time use, <5% down: 2.15%
• Subsequent use: 3.3%
• Exempt: Veterans with service-connected disability

On $400,000 VA loan (first use, 0% down): Funding fee is $8,600. Can be financed.

USDA Loans:

Jumbo Loans (over $766,550 in most areas for 2026):

Jumbo loans often have stricter requirements and higher fees due to increased lender risk.