Use this tool to estimate the total closing costs for a real estate transaction in Tennessee. The estimate includes typical lender fees, title insurance, and the mandatory TN transfer tax.
Tennessee Closing Cost Estimator
Detailed Cost Breakdown
Tennessee Closing Cost Formula
$$\text{Total Cost} \approx \text{LOF} + \text{TT} + \text{Title} + \text{Other Fees}$$
Where:
- LOF = Loan Origination Fee (Percentage of Loan Amount)
- TT = Tennessee State Transfer Tax (0.37% of Purchase Price)
- Title = Title Insurance and Settlement Fees (Fixed Amount)
- Other Fees = Appraisal, Credit Report, etc.
Formula Sources: TN Dept of Revenue – Transfer Tax, Fannie Mae Closing Cost Guide
Calculator Variables Explained
- Purchase Price: The full contract price of the home. Used to calculate the state’s transfer tax.
- Loan Amount: The amount borrowed from the lender. Lender Origination Fees and Private Mortgage Insurance (if applicable) are based on this value.
- Lender Origination Fee (%): A fee charged by the lender for processing the loan, typically 0.5% to 1.5% of the loan amount.
- Title & Closing Fees (Fixed $): An estimate for combined costs including title insurance policy, settlement fees, and attorney/closing agent fees.
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What are Closing Costs in Tennessee?
Closing costs are the fees paid at the closing of a real estate transaction. These costs are separate from the down payment and typically range from 2% to 5% of the loan amount, but this can vary significantly in Tennessee based on local practices and the type of loan.
In TN, a key mandatory component is the **Transfer Tax**, which is $0.37 per $100 of the sale price (or $3.70 per $1,000). This state-level tax is usually paid by the buyer but can be negotiated. Other common costs include appraisal fees, credit report checks, title insurance, attorney fees, and lender origination fees, all bundled into the final closing figure.
How to Calculate Estimated Closing Costs (Example)
- Determine the Key Amounts: Suppose the Purchase Price is $350,000 and the Loan Amount is $280,000.
- Calculate Lender Fees: If the Lender Origination Fee is 1.0%, the fee is $280,000 * 0.01 = $2,800.
- Calculate TN Transfer Tax: The rate is 0.37%. $350,000 * 0.0037 = $1,295.
- Add Fixed Costs: Assume a fixed cost for title insurance and closing fees of $1,500.
- Sum the Total: Total Estimated Cost = $2,800 (Lender) + $1,295 (Tax) + $1,500 (Title) = $5,595.
Frequently Asked Questions (FAQ)
Is the Tennessee Transfer Tax included in closing costs? Yes, the state-mandated transfer tax ($0.37 per $100 of the sales price) is a standard item in the closing costs. The buyer usually pays this, but it is negotiable.
How much are closing costs typically in Tennessee? While the national average is often 2% to 5% of the loan amount, Tennessee’s costs can sometimes be lower, mainly due to competitive title and attorney fees. Always get a Loan Estimate (LE) for accurate figures.
What is the difference between a Loan Estimate and a Closing Disclosure? The Loan Estimate is provided within three business days of applying for a loan and is an *estimate*. The Closing Disclosure (CD) is provided three business days before closing and contains the *final*, locked-in costs.
Can I finance my closing costs into my loan? Sometimes. Some loan programs allow borrowers to roll certain closing costs into the mortgage, though this increases the overall loan amount and accrues interest over time.