Related: Cash-to-Close Calculator
What This Calculator Does
The tool separates Loan Costs from Other Costs in a structure similar to the Loan Estimate. It then shows gross costs, estimated total closing costs after entered lender credits, and an estimated borrower share after listed lender and seller credits.
Using itemized editable amounts is more transparent than assuming every buyer will pay the same percentage of a home’s price.
Worked example
If entered Loan Costs total $9,000 and Other Costs total $9,000, gross closing costs are $18,000. A $2,000 lender credit produces estimated total closing costs of $16,000. If a $5,000 seller credit also applies, the estimated borrower share of those costs is $11,000 before considering the down payment, deposit, or other cash-to-close adjustments.
Formula and Methodology
Loan Costs combine entered origination charges, appraisal and required services, title and settlement services, and other loan costs. Other Costs combine entered government fees, prepaid interest, prepaid insurance, property-tax prepaids, initial escrow funding, and other costs.
Estimated total closing costs subtract entered lender credits from gross costs. Estimated borrower share also subtracts entered seller credits. The purchase price is used only to show the estimated total as a percentage for context.
Assumptions and Limitations
Assumptions
- Users enter current transaction-specific estimates whenever available.
- Lender and seller credits are entered as positive dollar amounts.
- The calculator does not assume that a particular fee or credit applies to every transaction.
What It Cannot Determine
- It does not calculate the down payment or final cash to close.
- It does not determine which charges may change or by how much under applicable disclosure rules.
- Title, recording, transfer, tax, insurance, escrow, and settlement practices vary by location and transaction.
- Final figures come from the lender and settlement professional.
Frequently Asked Questions
Are closing costs included in the down payment?
No. Closing costs and the down payment are separate components. Both can affect the amount of cash required at closing.
Are prepaids considered closing costs?
Prepaids appear within Other Costs on the Loan Estimate and Closing Disclosure. They can include prepaid interest and an initial homeowners insurance premium.
Do lender credits make a loan free?
No. Lender credits offset some upfront costs and may be associated with a higher interest rate than an otherwise similar option without the credit.
Why do closing-cost estimates change?
Charges may change as providers are selected, the closing date is set, insurance and tax information is confirmed, the loan changes, or permitted revisions occur.
Official Sources
The methodology and terminology were checked against the following primary government resources. Loan Under Review is not affiliated with or endorsed by these agencies.
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Educational disclaimer
This calculator provides an educational estimate based on the information and assumptions entered. It is not a loan estimate, rate quote, appraisal, preapproval, approval decision, financial recommendation, or commitment to lend. Actual program requirements, qualifying calculations, rates, fees, insurance costs, taxes, and lender practices may differ.
Last reviewed: by the Loan Under Review Editorial Team.