The Closing Cost Calculator: Understanding Your Responsibilities

By Kelly Richardson
LoanPage.com Columnist

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While the process of obtaining a mortgage is still a stressful and arduous period for homeowners, technology tools have made the quest for a home loan a bit more manageable. One of those tools that helps is the closing cost calculator. Use it to determine exactly what you'll owe when it comes time to sign on the line.

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A closing cost calculator is, in its essence, a mathematical formula that will allow you to see a complete breakdown of the items you'll be responsible for paying when you close on your new mortgage. A simple keyword search for "closing cost calculator" will give you several sites that offer a closing cost calculator for you to use before you go to closing. You simply enter the information provided by your mortgage lender into the fields and it will do all of the calculations for you.

Closing Costs Calculator Fields

  • » Loan Items Payable. For new home loans, payable loan items include the loan origination fee (typically 1% of the loan amount), the appraisal fee, the credit report, the tax service fee, the underwriting fee, and the flood certificate.
  • » Pre Paid Items. Pre paid items include interest, which will be anywhere between 1 and 30 days worth, depending on the time of the month you close, and hazard insurance that carries a one year premium.
  • » Reserves. Reserve costs include two months of hazard insurance and taxes and two months worth of mortgage insurance if you're financing over 80 percent of the total loan amount.
  • » Title Charges. Title charges vary widely from lender to lender and typically include a closing fee, the title policy, any endorsements, and a courier fee. You can use the variance in fees charged as a leverage point over borrowers.
  • » Recording and Transfer Fees. Recording and transfer fees include recording fees, document stamps, and intangible tax and stamps on the mortgage. These particular fees will change from state to state.
  • » Additional Charges. Additional charges represent all other fees incurred by the lender that they feel obligated to bill. Again, you might consider going with a mortgage lender that has the lowest additional charges.
The online closing cost calculator is design to give you a round estimate and is not the final word. Always check with your home loan lender for their specific fees, percentages, and charges.

About the Author
Kelly Richardson covers the real estate scene in major cities across the country. His articles appear in educational journals, periodicals, and e-zines.

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