Enter the total purchase price ($) and the closing cost fee percentage (%) into the Closing Cost calculator. The calculator will evaluate and display the Closing Cost. 

Closing Cost Formula

The following formula is used to calculate the Closing Cost. 

CC = PP * CCF / 100
  • Where CC is the Closing Cost ($)
  • PP is the total purchase price ($) 
  • CCF is the closing cost fee percentage (%) 

How to Calculate Closing Cost?

The following example problems outline how to calculate Closing Cost.

Example Problem #1:

  1. First, determine the total purchase price ($). The total purchase price ($) is given as 500,000.
  2. Next, determine the closing cost fee percentage (%). The closing cost fee percentage (%) is provided as 5.
  3. Finally, calculate the Closing Cost using the equation above: 

CC = PP * CCF / 100

The values given above are inserted into the equation below:

CC = 500,000 * 5 / 100 = 25,000 ($)


FAQ

What factors can affect the closing cost fee percentage?

The closing cost fee percentage can vary based on several factors including the location of the property, the type of loan you are getting, and the negotiations with the seller. Local government regulations can also play a significant role in determining the percentage.

Are there any ways to reduce closing costs?

Yes, there are several strategies to reduce closing costs. Buyers can negotiate with the seller to pay a portion of the closing costs, shop around for lenders who offer lower fees, or close at the end of the month to reduce prorated interest charges. Additionally, some lenders offer no-closing-cost mortgages, where the closing costs are rolled into the loan, albeit at a higher interest rate.

Can closing costs be included in the financing of the home?

In certain loan types, such as FHA loans, some of the closing costs can be rolled into the financing of the home. However, this increases the loan amount and, consequently, the overall interest paid over the life of the loan. It’s important to discuss with your lender what options are available and how they impact your loan terms.