Buying a home is a significant milestone, but many buyers are often surprised by the additional expenses that arise at closing. These fees, which are in addition to your down payment, can significantly increase your total cost. That’s why our closing cost calculator for buyers is here to help you get a fast, accurate estimate before you sign on the dotted line.

Whether you’re a first-time buyer or refinancing, understanding what to expect and how much closing fees are can help you plan your budget and avoid last-minute surprises.

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Closing Costs Calculator
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A discount point costs 1% of the loan amount at closing and each discount point lowers the borrower's interest rate by 0.25%.
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Your total estimated closing costs could be:
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Closing costs would be X.X% of your purchase price. Get a more accurate closing cost estimate by adjusting fees to fit your situation.
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A lender fee for processing and creating your loan.
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Cost of having a professional assess the home’s market value.
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Charges for verifying and insuring the home’s legal ownership.
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Legal fees for reviewing or handling the home closing paperwork (required in some states).
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Fees paid to your local government to officially record the property purchase.
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Cost for a home inspection to assess the property's condition before purchase.
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Insurance that protects your home against damage or loss. Typically required before closing.
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Estimated local property taxes, typically paid upfront for a portion of the year.
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Interest charged from the closing date until your first mortgage payment.
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What Are Closing Costs?

Closing costs are the collection of fees and expenses paid at the end of a real estate transaction. They include both lender charges and third-party service fees, which are essential for completing the loan and transferring property ownership. Typical closing costs include:

  • Loan origination and underwriting fees
  • Appraisal and home inspection fees
  • Attorney and recording fees
  • Prepaid interest, property taxes, and homeowners insurance
  • Title insurance and escrow fees

While some of these fees are fixed, others vary based on your home price, loan type, and location. It’s essential to understand each one so you’re not caught off guard.

How Much Are Closing Costs?

Knowing how much closing costs are will help you determine your next step in homebuying. On average, closing costs typically range from 2% to 5% of your home’s purchase price.

So if you’re purchasing a $400,000 home, your closing fees may fall between $8,000 and $20,000. The actual amount you pay depends on several variables, including your lender, the type of loan, and the location of the property.

Here’s a sample estimate for a $400,000 purchase:

  • Cost Item / Estimated Amount
  • Underwriting + Origination + Processing + Lender Fees: $4,000
  • Appraisal + Inspection: $600
  • Title + Escrow Services: $2,500
  • Property Taxes (2 mo.): $1,200
  • Homeowners Insurance (1 yr.): $1,200
  • Prepaid Interest: $300
  • Recording + Attorney Fees: $500
  • Total Estimate: $10,300

Keep in mind that this is just a general example. In some high-cost areas, you may face additional fees like transfer taxes or attorney reviews, which can push your total higher. Conversely, some states have more buyer-friendly fee structures or lower tax burdens that can bring your total down.

Your loan type also plays a role. For example, VA and FHA loans include specific costs, such as funding fees or upfront mortgage insurance premiums. Additionally, the size of your down payment can influence how much you’ll need in escrow reserves for taxes and insurance.

How to Calculate Closing Costs

Knowing how to calculate your closing costs is as simple as adding up three main types of expenses:

  1. Lender fees, which include origination fees, underwriting, and credit report processing.
  2. Third-party charges, such as appraisal, home inspection, title search, and insurance.
  3. Prepaid items include homeowners insurance, property taxes, and prepaid interest.

Manually totaling these amounts gives you a rough estimate of your closing costs. However, using Griffin Funding’s closing cost estimator can help you save time and improve accuracy, especially if you’re comparing loan options. For VA loans, review our guide to VA loan closing costs to see how benefits differ.

What Factors Affect Your Closing Cost Estimate?

Several variables can influence your final closing costs:

  • Property location: Some states, like Texas and Florida, have no income tax but higher property taxes. Other states, such as New York, require attorney involvement, which can increase your legal fees. On one hand, property tax deductions are another element to consider.
  • Loan type and size: VA, FHA, and jumbo loans have unique fee structures. Larger loans may require higher appraisal or title fees.
  • Purchase price and down payment: A bigger loan amount typically means more taxes and insurance, but a higher down payment could reduce your escrow requirements.
  • Buyer vs. seller contributions: In a competitive market, buyers typically cover the majority of costs. In slower markets, sellers may be willing to offer concessions to close the deal.

Typical Closing Costs Explained

A house key in the lock of an open door leading to a living room.

Each closing cost will be itemized in your Closing Disclosure before your final signing appointment. Before waiting until then to understand the pricing, here’s a more detailed look at the most common charges:

  • Discount points: Optional fees you can pay upfront to lower your mortgage rate
  • Origination fee: A flat charge (often 0.5%–1%) for processing the loan
  • Appraisal fee: Required by lenders to confirm property value
  • Title fees: Covers the title search, title insurance, and settlement services
  • Attorney fees: Required in some states for legal review of the transaction
  • Recording fees: Paid to the local clerk to record your deed and mortgage
  • Inspection fees: May include home, pest, and roof inspections
  • Homeowners insurance: Usually paid for the first 12 months at closing
  • Property taxes: Often collected upfront for escrow purposes. These are typically charged as property taxes by the state.
  • Prepaid interest: Covers daily interest from the closing date to month’s end

Tips to Save on Closing Costs

Closing costs aren’t entirely fixed, and with a bit of strategy, you can reduce what you owe at the closing table. Here are several effective ways to lower your out-of-pocket expenses:

  • Shop around: Compare quotes from different title companies, home insurance providers, and settlement services to find the best rates.
  • Negotiate lender fees: Ask your lender if origination, underwriting, or application fees can be reduced or waived.
  • Request lender credits: Some lenders allow you to accept a slightly higher interest rate in exchange for a credit that offsets closing costs.
  • Seek seller concessions: In a buyer’s market, sellers may agree to cover part or all of your closing fees to help close the deal.
  • Use grants or assistance programs: Many state, local, or nonprofit programs offer financial help to first-time or low-to-moderate-income buyers.

The Griffin Gold app offers a centralized hub for managing estimates, comparing fees, using smart tools like our closing cost calculator for buyers.

Compare Your Mortgage Options

Not all home loans are created equal, and neither are their closing costs. Choosing the right mortgage can save you thousands of dollars over time, not just in interest, but also in upfront fees like origination charges, mortgage insurance, and escrow reserves. Griffin Funding offers a full suite of solutions tailored to diverse financial needs, including:

  • Conventional loans
  • Non-QM options for self-employed borrowers
  • VA loans for eligible military members
  • FHA loans with low down payment options

Our loan officers provide one-on-one support while our digital tools streamline the process, giving you real-time insights into rates, costs, and savings. Whether you’re refinancing or purchasing your first home, Griffin Funding helps you make informed decisions. Plus, our expert analysis of the housing market enables you to choose the right time to buy.

Ready to begin your homeownership journey? Reach out or get started online today!

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Frequently Asked Questions

Can you negotiate closing costs?

Yes, closing costs are not set in stone. Many buyers are surprised to learn they have options when it comes to negotiating fees. You can ask your lender to reduce or waive charges, such as the application or underwriting fee. 

You can also shop around for third-party services, such as title insurance, escrow services, and home inspections, which can vary widely in price. Don’t hesitate to request a fee breakdown and inquire about price matching or promotional discounts. Some lenders may even offer incentives for using in-house services or preferred vendors.

Can closing costs be rolled into the loan?

In some instances, yes. Borrowers who are refinancing often have the option to roll their closing costs into the new loan amount, which helps preserve cash flow. For home purchases, it’s less common but sometimes possible when using lender credits or if the loan type allows for financed closing costs.

Keep in mind that rolling costs into the loan increases your loan balance, which may result in a slightly higher monthly payment or more interest paid over time. It’s important to review all terms with your lender to see what’s best for your financial goals.

Do I need to pay all closing costs upfront?

Most closing costs are paid at the time of closing, typically in a single lump sum. However, certain expenses may arise earlier in the process. For example, you may be required to pay for a home inspection, appraisal, or credit report upfront.

These out-of-pocket costs can add up, so it’s essential to budget for them in advance. Your lender is required to provide a Loan Estimate early in the application process, which breaks down all anticipated costs and their due dates. Reviewing this carefully will help you stay financially prepared at every step.

Bill Lyons is the Founder, CEO & President of Griffin Funding. Founded in 2013, Griffin Funding is a national boutique mortgage lender focusing on delivering 5-star service to its clients. Mr. Lyons has 24 years of experience in the mortgage business. Lyons is seen as an industry leader and expert in real estate finance. Lyons has been featured in Forbes, Inc., Wall Street Journal, HousingWire, and more. As a member of the Mortgage Bankers Association, Lyons is able to keep up with important changes in the industry to deliver the most value to Griffin's clients. Under Lyons' leadership, Griffin Funding has made the Inc. 5000 fastest-growing companies list five times in its 12 years in business.