How the calculator adds it up
Closing costs fall into two very different groups. Loan and transaction costs are fees: the lender's charges, title insurance, the settlement agent, and government recording and transfer taxes. Prepaids and escrow are your own future bills paid in advance. The calculator follows the lettered sections of the federal Loan Estimate, so you can line it up against a real one. Here is the opening example, worked by hand:
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1
Lender fees (A and B)
Origination at 0.50% of a $360,000 loan is $1,800. Add a $600 appraisal and $200 for the credit report, flood check and tax service: $2,600.
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2
Title and settlement (C)
A lender's title policy at 0.35% of the loan is $1,260, plus an $800 settlement fee: $2,060.
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3
Government (E)
$250 to record the deed and mortgage. The U.S. average setting adds no state transfer tax; pick your state to add it. Fees so far: $4,910.
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4
Prepaids (F)
A year of insurance, $2,400, plus 15 days of interest: $360,000 × 7.24% ÷ 365 × 15 = $1,071.12.
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5
Initial escrow (G) and the total
Three months of tax ($400,000 × 0.89% ÷ 12 × 3 = $890) and two of insurance ($400) is $1,290. Total closing costs: $9,671.12, or 2.42% of the price. Add the $40,000 down payment and you need $49,671 at closing.
Reading your Loan Estimate
Lenders must use the same three-page Loan Estimate form, and must send it within three business days of your application. That makes it the best tool for comparing offers. Page 2 holds the costs:
| Section | What's in it | Can it go up? |
|---|---|---|
| A. Origination | Lender's own fees and points | No (zero tolerance) |
| B. Can't shop for | Appraisal, credit report, flood check | No (zero tolerance) |
| C. Can shop for | Title insurance, settlement, survey | Up to 10% in total if you use the lender's list |
| E. Taxes and fees | Recording fees, transfer taxes | Recording: within 10%. Transfer tax: no |
| F. Prepaids | Insurance, prepaid interest, tax due | Yes, no limit |
| G. Initial escrow | Months of tax and insurance | Yes, no limit |
| H. Other | Owner's title policy, HOA transfer fees, inspection | Yes, no limit |
These limits come from the federal TILA-RESPA rule. If a fee in a zero-tolerance group rises at closing without a valid reason, such as a change you asked for, the lender has to refund the difference. When you compare lenders, look at section A, the points, and the APR on page 3. Sections F and G will be about the same whichever lender you pick, because they're your own bills.
The Closing Disclosure
At least three business days before closing, the lender must give you a five-page Closing Disclosure with the final numbers. Put it next to your last Loan Estimate and check the loan amount, rate, monthly payment, each section's total, the seller credit and the cash to close. If the APR becomes inaccurate, the loan product changes or a prepayment penalty is added, a new three-day wait starts. Wire your cash to close only after confirming the instructions by phone with a number you already know: wire fraud aimed at home buyers is common.
Transfer and mortgage taxes by state
This is the line that varies most. Some states charge nothing. Others tax the deed, the mortgage, or both, and many counties and cities add their own tax on top. Who pays is set by law in some places and by custom in others, and the purchase contract can shift it. The state presets below cover only the state-level taxes a buyer customarily pays, from official sources:
| State | Buyer usually pays | Preset |
|---|---|---|
| District of Columbia | Deed recordation tax: 1.1% of price under $400,000, 1.45% at $400,000 or more. Eligible first-time DC buyers pay 0.725%. The seller pays the transfer tax. D.C. Code § 42-1103 | 1.1% or 1.45% of price |
| Delaware | Half of the 4% total (2.5% state plus 1.5% local), split equally by law. First-time buyers get up to $2,000 off their share. 30 Del. C. ch. 54 | 2% of price |
| Florida | Documentary stamp tax on the mortgage: 35 cents per $100 of the loan. The seller customarily pays the 0.70% deed stamps. Florida also has a nonrecurring intangible tax on mortgages; ask your title company for it. Florida Dept. of Revenue | 0.35% of loan |
| Georgia | Intangible recording tax: $1.50 per $500 of the loan, capped at $25,000. Georgia Dept. of Revenue | 0.3% of loan |
| Maryland | Half of the 0.5% state transfer tax by custom. First-time Maryland buyers usually owe none of it. County recordation and transfer taxes come on top and vary. Md. Tax-Prop. § 13-203 | 0.25% of price |
| Minnesota | Mortgage registry tax: 0.23% of the loan. The seller customarily pays the 0.33% deed tax. Minn. Stat. § 287.035 | 0.23% of loan |
| New York | Mortgage recording tax: 0.50% basic plus 0.25% additional outside the MCTD (0.30% inside), about 0.75% of the loan; New York City and some cities charge more. Mansion tax of 1% of the price on homes of $1 million or more. N.Y. Tax Law § 253 and § 1402-a | 0.75% of loan, +1% of price at $1M |
| Pennsylvania | Half of the 1% state realty transfer tax plus half of the local tax, which is usually 1% (more in Philadelphia and Pittsburgh), by custom. Pennsylvania Dept. of Revenue | 1% of price |
| Virginia | Recordation tax: 25 cents per $100 on the deed (price or assessed value, whichever is higher) and on the deed of trust (loan), plus a local tax of up to one-third of the state tax on each. The seller pays the 0.1% grantor tax. Va. Code § 58.1-801 to -803 | 0.33% of price + 0.33% of loan |
| New Jersey | None at the state level. The seller is responsible for the realty transfer fee and the graduated fee on homes over $1 million, which replaced the buyer's mansion tax. NJ Division of Taxation | 0% |
| South Carolina | None by law: the deed recording fee of $1.85 per $500 falls on the seller (grantor). S.C. Code Title 12, ch. 24 | 0% |
| Washington | None: the seller pays the real estate excise tax (1.1% to 3% by price bracket in 2026, plus local). Washington Dept. of Revenue | 0% |
For any other state, the calculator leaves both tax fields at 0%. That is not a promise you'll owe nothing: ask your title or escrow company for the local figure and type it in.
Ways to lower the cash you need
- Get three Loan Estimates the same day. Origination charges and points vary more than any other line.
- Shop section C. You can choose your own title and settlement company. Ask for a quote with the lender's and owner's policies issued together, which is often cheaper.
- Ask for a seller credit. It has to be written into the purchase contract and stays within your loan program's limit.
- Consider a lender credit. A slightly higher rate can cover some fees. It helps if you expect to sell or refinance within a few years.
- Pick the closing date. Closing near the end of the month cuts prepaid interest, though it doesn't change the total interest over the loan.
- Look for help. State housing finance agencies and some cities offer closing cost assistance to first-time buyers.
Sources and assumptions
- Loan Estimate and Closing Disclosure: CFPB explainers for the Loan Estimate (modified October 29, 2025) and the Closing Disclosure. Timing, the new three-day wait and the tolerance groups: Regulation Z, 12 CFR 1026.19(e) and (f).
- Default rate for prepaid interest: Freddie Mac Primary Mortgage Market Survey, 30-year fixed 7.24%, week of October 29, 2026. Interest uses a 365-day year; some lenders use 360.
- Property tax: Tax Foundation, Property Taxes by State and County, 2026 (2024 ACS effective rates); U.S. average 0.89% from NAHB.
- State transfer and mortgage taxes: the official state pages linked in the table above, checked October 2026. Local taxes are not included.
- Seller credit limits: Fannie Mae Selling Guide B3-4.1-02, Interested Party Contributions; HUD Handbook 4000.1 (6%); VA funding fee and closing costs (4% concessions, updated October 5, 2026).
- Our estimates, not survey data: origination 0.50% of the loan (the low end of the 0.5% to 1% that Bankrate gives as typical, checked November 1, 2026), appraisal $600, credit report and other lender services $200, lender's title policy 0.35% of the loan, settlement fee $800, recording $250, insurance $2,400 a year (between the NAIC's $1,569 for 2022, via the Insurance Information Institute, and 2026 averages of about $2,490 from NerdWallet to $3,057 from Insurify, via Claims Journal, March 18, 2026), 15 days of interest, 3 months of tax and 2 of insurance in escrow. For scale: on the default $360,000 loan, the lender, services and title lines (Loan Estimate sections A to C) add up to $4,660 with no points. The CFPB's median for these total loan costs, points included, was $6,684 on 2023 home purchase loans, on a median loan of $315,000 (CFPB, 2023 Mortgage Market Activity and Trends, December 2024). Title rates are set or filed by state and differ widely. Replace every default with your Loan Estimate.
- Not included: home inspection, HOA transfer fees, survey, attorney fees where required, mortgage insurance premiums paid up front, and moving costs. This is an educational estimate, not an offer of credit or legal or financial advice.
Common questions
How much are closing costs for a buyer?
It varies a lot by state, lender and loan size. In this calculator's example, a $400,000 home with a $360,000 loan comes to about $9,671, or 2.42% of the price: $4,910 in lender, title and recording fees plus $4,761 of prepaid insurance, interest and escrow. Your down payment comes on top.
What is the difference between a Loan Estimate and a Closing Disclosure?
A lender must send a Loan Estimate within three business days of your application, so you can compare offers. The Closing Disclosure shows the final terms and costs and must reach you at least three business days before closing. Compare the two line by line before you sign.
Who pays the transfer tax, the buyer or the seller?
It depends on the state and local custom, and the purchase contract can change it. In many states the seller usually pays the deed transfer tax, while buyers often pay taxes for recording the mortgage. Some places split the tax, and counties and cities can add their own.
Can the seller pay my closing costs?
Yes, through a seller credit written into the purchase contract, up to your loan's limit. Fannie Mae allows 3% of the price when you put down less than 10%, 6% from 10% to 25% down and 9% above that. FHA allows 6%, and VA caps seller concessions at 4% of the home's value.
Can closing costs be rolled into the mortgage?
On a purchase, usually not, although FHA's upfront premium and VA's funding fee can be financed. Instead, you can negotiate a seller credit or accept a lender credit in exchange for a higher interest rate.
What are prepaids and the initial escrow deposit?
Prepaids are bills paid in advance at closing, usually a full year of homeowners insurance and the interest from closing day to the end of the month. The initial escrow deposit gives your escrow account a few months of property tax and insurance so the servicer can pay those bills on time.