- 1). Use a mortgage calculator to help you determine an estimated closing cost for your home purchase. Many lending institutions offer this service free of charge.
- 2). Enter the loan amount you are seeking from the lending institutions
- 3). Enter the asking price of the home or value of the home. Because the loan amount will be based on this number be certain that it is as accurate as possible. Most lending institutions depending on the type of loan your are seeking may add a fee into the total purchase price of the loan— this is very common with VA loans (veterans loans), this fee is known as the VA funding fee and it is most often 1.5% to 3.3% of the loan amount, the funding fee may be financed in some cases depending on the lending institution you choose. Be sure to ask about any additional fees prior to obtaining the loan.
- 4). Determine the amount of the down payment that will be made on the house. In order to properly calculate the closing costs you must enter the loan amount desired and the actual value of the home, this means that if you request a loan for $400,000, you would need to enter a desired loan amount of $360,000 if applying for a 10% discount.
- 5). Know the type of financing you desire to use to purchase your home. Many banks only offer conventional loans, while others will offer both conventional and VA loans—VA loans do not require a down payment, which is why most lenders find them unfavorable.
- 6). Determine the loan type do you want a fixed rate loan or an adjustable rate mortgage, also known as an ARM. Remember that an ARM or adjustable rate mortgage is not a great option for everyone; determine what will suit your financial situation the best.
- 7). Enter the city where the home is located in to the mortgage calculator.
- 8). Enter the county of the home.
- 9). Decide the loan term you want to use; it can be a 10 to 30 year loan.
- 10
Press the calculate button to determine your estimated closing cost.
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