Closing Costs Calculator

FHA loans add an upfront mortgage insurance premium of 1.75% of the loan amount, and VA loans add a funding fee of 2.3% on a borrower's first use of VA benefits — neither fee applies to a conventional loan. These government-backed loan programs offset their more flexible qualification requirements (lower down payments, no PMI on VA loans) with this kind of upfront cost, which shows up directly in Government Fees.

A bigger down payment shrinks the loan amount, since Loan Amount equals Home Price minus Down Payment, and several fee categories — the Origination Fee and Discount Points among Lender Fees, plus the FHA upfront MIP or VA funding fee if applicable — are calculated as a percentage of the loan amount rather than the home price. A larger down payment therefore lowers total closing costs somewhat, even though it raises the total cash needed at closing overall since the down payment itself is a much larger number.

Transfer tax is a state or local tax charged on the transfer of real-estate ownership, calculated as a percentage of the home price, and it varies enormously by state and even by county — some states charge nothing, others charge over 2%. The FHA upfront MIP or VA funding fee, by contrast, is a federal program fee tied specifically to the loan type you select, not to where the property is located.

When a mortgage closes partway through a month, interest accrues from the closing date through the end of that month before the first regular monthly payment begins, and that interest is collected upfront at closing rather than added to the first payment. This calculator estimates roughly 15 days of prepaid interest on the loan amount as part of the Prepaid Items bucket, alongside the first year of homeowners insurance and several months of property tax escrow.