Online Free Buyer Closing Cost Estimator by Loanfully

You can determine how much your buyer closing costs are by using an itemized list of specific fees, or you can use our free online calculator to estimate those charges.

The calculator is easy to use, and you’ll have a closing cost estimate in only a minute or two. 

Knowing your costs allows you to plan for that escrow bill, and it’s also a useful bit of information when you’re shopping for a home.

Simply input the parameters of the prospective property into the free online calculator, and you’ll immediately see the estimated closing costs for that particular property.

While the average closing costs for a buyer total 1-5% of the final sales price, your fees may run up to 6%. The amount of house closing costs you’ll pay depends on a number of factors.

The age of the structure, the amount you decide to put down on the home purchase, the type and amount of coverage for hazard insurance you elect to buy, and the cost and location of your new home all factor into your total closing costs bill as a buyer.

Most property closing costs are mandatory for buyers, but some fees are optional, and the buyer can save money by skipping using some of the services.

Let’s start with the mandatory fees that most buyers will pay as part of their final closing bill.

Loan, Title and Escrow Costs

• Appraisal fees: Your mortgage lender requires at least one home appraisal on the property to ensure the price paid is comparable to sales of similar properties in the area. 
• Credit report fees: A report will be ordered when you apply for a mortgage. Another report will be ordered immediately before the loan funds to ensure the buyer doesn’t have any new credit issues.
• Title research and lender’s title insurance costs: Your lender requires a clear title on the property, and the only way to determine that is doing a title search to look for any potential clouds that would impact claims of ownership. Once the search is done, your lender also requires the buyer to pay for a title insurance policy that protects the home from any unrecorded liens that may be discovered after the final transaction closing.
• Private mortgage insurance (PMI): This mortgage closing cost is applied when you purchase a home without putting 20% down. It requires you to make a lump sum policy payment to protect your mortgage against any default. You may also need to make smaller monthly PMI payments for the life of the loan. Some mortgages demand PMI payments until the amount of your equity in the home reaches 20% of your sales price.
• Origination and underwriting fees: Some lenders have line item charges that include a fee for creating the official loan paperwork and for the lenders’ review of the purchase and the mortgage applicants’ qualifications.
• Parcel survey fees: This survey charges the buyer a fee for a professional evaluation of the parcel. This is typically done when the purchase includes a significant amount of land, or there’s a cloud on the property title due to an easement or a lien using a portion of the parcel.
• Transfer taxes: These taxes may be paid by either the seller, buyer, or divided between both parties. It’s a fee that might be charged by a state, county, village, town or city to transfer ownership of the property.
• Escrow charges: Your escrow officer will prepare your documents, supervise the transaction, and manage the money involved in the sale.
• Homeowner Association fees: When the sale property is part of an HOA, you may need to pay an initial membership fee and a prorated amount for the first monthly fee as part of your closing costs.

The next grouping of closing costs are typically done as a convenience for the buyer, and they may have an initial fee to set up.

Some lenders or special first-buyer assistance programs, however, may require all three as part of the lending agreement.

Discretionary Closing Costs

• Property tax prepayments: Buyers may pay property taxes in advance as part of the real estate closing costs.
• Hazard insurance prepayments: The new homeowners may also place cash in a separate escrow account to be used to make future insurance payments.
• Radon and environmental tests: Properties may have environmental issues that buyers want to investigate in detail. This category includes a test for radon. Some states or localities, however, require a radon test (and remediation should the test return high levels) to close the transaction.
• Attorney fees: A number of states require a real estate attorney to take charge of the escrow process or to supervise the final closing.
• Discount loan interest points: Buyers may elect to purchase loan discount points to reduce the interest rate on a mortgage. These points are paid as part of the closing fees.
• The last group of closing costs is elective but may influence whether the buyer decides to proceed with the sale.

Elective Closing Fees

• Additional Property Inspections: When the property disclosure lists defects that aren’t visible, buyers may elect to hire professional inspectors to do in-depth investigations. These special reports might look at roof, foundation, or involve a close look at special amenities like a swimming pool.

Our online closing cost calculator offers a quick and easy way to give you an estimate that combines these fees and charges.

There are different ways to do it. Let's go over them.

Shopping for Services

There are a number of firms offering home loans, escrow services, title research firms, real estate agents and home inspection services charging a range of prices.

Shopping qualified services and comparing pricing can save a significant amount on your closing costs.

Eliminating Lender Fees

Negotiating with your lender to remove some service costs, or waive all of the non-essential closing costs, is another way to reduce your final closing bill. Some fees have a greater chance to be waived, including:

Credit Reports: The buyer is typically billed for this service, although some state and local assistance programs may cover the cost of the appraisal. A private lender may waive this fee, depending on the price paid for the property.

Origination and Underwriting Fees: Your lender may be persuaded to eliminate (or reduce) these fees.

Appraisal costs: This is another charge that is negotiable for some lenders.

Reducing Junk Fees

Your lender, title and escrow services may bill buyers for a host of discretionary fees that add to the closing bill, including things like messenger and courier services, wire transfer fees, and administrative charges.

A number of buyers don’t examine their good faith loan estimate (GFE) or closing disclosure (CD) carefully, or they’re unaware of the difference between mandatory and discretionary billing, so they’ll simply pay the closing costs listed on the final CD.

Under federal law, you’ll receive a GFE when you accept a loan and also an accounting of the closing costs on a printed closing disclosure (CD) three days before the transaction’s final closing.

You can avoid all or most closing costs by using the following ways:

Waivers

Obtaining fee waivers for services is the easiest way to avoid closing costs. Your lender may agree to waive some of the many fees listed on your good faith estimate loan disclosure. 

Negotiating 

Shopping pricing for agents, escrow, title, inspections and lenders before making an offer on a home prepares you for negotiations with these services.

Target specific fees that you’d like eliminated or reduced. Ask for more, settle for less, is the watchword when you negotiate.

Rolling Fees

Your lender may allow you to roll all of your closing costs into your mortgage. You then won’t pay those fees at closing, but you’ll eventually pay them over the term of your mortgage.

Yes, there are a number of them — on the national and local levels.

The Federal Housing Administration 

FHA approves local lenders to offer mortgages backed by federal money conditioned on lending to buyers with lower credit scores. An FHA loan requires a lower interest rate and closing costs.

Also, it’s easier to qualify for an FHA loan if you have a bad credit history.

However, FHA loans are still more expensive than conventional loans overall.

Department of Veterans Affairs 

A VA loan can extend credit to qualified borrowers with military service to purchase a house without a down payment.

They typically have lower closing costs, allow borrowers to skip PMI, and offer an opportunity to roll funding fees into the mortgage itself.

The United States Department of Agricultural Rural Development 

Borrowers given USDA-RD loans typically don’t need to put down any cash to buy real estate. Federal funders for the loans made through local lenders also don’t have PMI payments.

Buyers may also qualify for a stacked USDA-RD loan to pay for renovations, improvements and repairs, and to install water or waste systems on the property. The loan even covers constructing a house in a rural area.

Local lenders may have special fees, but the federal department doesn’t require borrowers to pay any additional fees or charges.

Borrowers using the Section 502 Guaranteed Loan Program must purchase a home in a rural area, meet income limits, be a U.S. citizen, and live in the home as a primary resident.

State and Local Assistance

Many states and localities have special down payment and closing cost assistance opportunities for groups of residents.

These typically have buyer income caps and require the applicant to purchase homes in special geographic zones for home renovation. Some focus on restoration of historic properties.

Many of these state and local assistance programs can be combined (stacked) with other home loans and other specialized grants.

Commercial Lender Assistance

Banking customers may find their financial institution offers special programs that provide closing cost assistance when buyers use the institution for their mortgage.

Perks from these programs include waiving credit report fees and loan origination and underwriting charges. These add up to significant savings for customers who are able to qualify.

Some programs highlight customers with large savings accounts, while others restrict the program to first-time home buyers or those purchasing homes in target geographic areas.

Private Foundations

Foundations and state-and-local private agencies may offer down payment and closing cost assistance to first-time buyers and people earning incomes that typically don’t qualify for home ownership.

Qualifications vary with the agency and foundation, but this assistance is generally given to buyers who agree to restore homes in specific neighborhoods as part of the qualification process.

The buyer’s down payment is the largest portion of the transaction closing costs. While some programs and special loans allow borrowers to eliminate the down, most require at least a down amounting to 3.5% of the final sales price.

Borrowers may prefer to put 20% down. That eliminates the need for PMI and all the fees and charges associated with that insurance policy.

The next largest category of closing costs are the various fees attached to the mortgage application, underwriting review and final funding.

Closing costs might include the buyer’s Realtor fees. Certain states and regions within states now ask the buyer to cover the real estate commissions for the agent they elect to work with to buy a property.

Commissions in most states are paid exclusively by the sellers, although the assignment and the way the commission is divided is up for negotiation between the buyers, sellers and the real estate agents involved in the sale.

Generally, there are two types of tax-deductible closing costs. But this depends on the state laws. Consult with your local tax professional before taking any decisions.

Federal Taxes

Buyers might be able to deduct mortgage interest, mortgage points and prepaid real estate taxes on their federal tax filings. This requires filing Schedule A.

State and Local Taxes

States may allow a closing cost deduction on state and local tax liability, but most do not. 

A number of states have special tax write-offs for borrowers who use state and local mortgage programs geared to first-time and low-income buyers to purchase a home.

Your lender might allow you to roll all or some of your closing costs into a conventional mortgage, but there’s no rule or regulation that requires that to be done.