Closing Cost Percentage Calculator
Understand what percentage of your home's purchase price goes towards closing costs.
Property Details
Closing Cost Percentage
3.00%
of purchase price
This percentage helps you quickly gauge the relative cost of closing fees compared to the home's value.
What Are Closing Costs?
Closing costs are fees paid at the closing of a real estate transaction. These are expenses, over and above the price of the property, that buyers and sellers incur to complete a real estate transaction. They can include a variety of charges such as loan origination fees, title insurance, appraisal fees, survey fees, taxes, and attorney fees.
Common Types of Closing Costs:
- Loan Origination Fees: Charged by the lender for processing your loan application.
- Appraisal Fee: Pays for a professional appraisal of the home to determine its fair market value.
- Title Insurance: Protects both the lender and the buyer from any disputes over property ownership.
- Escrow Fees: Paid to the escrow company or attorney who handles the closing process.
- Recording Fees: Paid to the local government for recording the new deed and mortgage.
- Prepaid Expenses: Often include property taxes and homeowner's insurance premiums that are paid in advance.
Why Calculate the Percentage?
While you'll always know the total dollar amount of your closing costs, understanding them as a percentage of the purchase price provides a more insightful perspective:
- Budgeting: Helps you set a realistic budget for your home purchase, as closing costs can add a significant amount to your upfront expenses.
- Comparison: Allows you to compare the relative cost of closing on different properties or with different lenders, even if the purchase prices vary.
- Negotiation: Knowing the typical percentage in your area can give you leverage during negotiations with sellers or lenders.
Typical Closing Cost Ranges:
Closing costs typically range from 2% to 5% of the home's purchase price. However, this can vary widely based on your location, the type of loan, and specific lender fees. For example, a $300,000 home might have closing costs between $6,000 and $15,000.
Plan Ahead: Always factor in closing costs when determining your home-buying budget. They are a significant part of the total cost of homeownership.