- Closing costs
- The fees and prepaid charges due when a mortgage is finalized, separate from the down payment. This calculator groups them into lender fees, third-party fees and prepaids and escrow. Amounts vary by state, lender and property; your Loan Estimate and Closing Disclosure show the binding figures.
- Lender fees
- Charges the lender collects for making the loan, such as origination, underwriting and processing fees, entered here as a percentage of the loan amount. Because they are based on the loan, not the price, a larger down payment lowers them. Discount points bought to reduce the rate would be added on top.
- Third-party fees
- Fees paid to outside providers rather than the lender: appraisal, title search and title insurance, settlement or attorney fees, credit report, survey and government recording charges. Some of these services you can shop for; the Loan Estimate shows which. This calculator takes them as a single dollar amount.
- Prepaids
- Costs paid at closing in advance of when they are due, such as the first year of homeowners insurance and interest from the closing date to the end of the month. They are not fees for the loan itself, but they still add to the cash needed to close. This calculator combines them with initial escrow deposits.
- Escrow account
- An account the loan servicer holds to pay property taxes and homeowners insurance on your behalf, funded by part of each monthly payment. At closing, the lender collects an initial deposit to seed it, which appears among the prepaids. The balance is reviewed each year and payments are adjusted if taxes or premiums change.
- Total cash to close
- The down payment plus estimated closing costs: the total a buyer should expect to bring to closing in this calculator. On the actual Closing Disclosure, the earnest money deposit and any seller or lender credits reduce it, so the check you write can be smaller than this figure.
- Closing costs as % of price
- Estimated closing costs divided by the home price. It is a quick way to compare an estimate with what is typical in your area or across lenders. Because lender fees scale with the loan while some third-party fees are flat, the percentage tends to be higher on lower-priced homes.
- Down payment
- The part of the purchase price paid in cash rather than borrowed. The loan amount is the home price minus the down payment. A larger down payment lowers the loan amount and the lender fees calculated on it, though it raises the total cash needed to close.
- Loan Estimate
- The standardized form a lender must provide shortly after you apply, showing the estimated rate, monthly payment, closing costs and cash to close. Because every lender uses the same format, it is the practical tool for comparing offers. Certain fees on it can increase at closing only within legal limits.
