Calculator Use
This down payment and closing cost calculator fha is designed to help prospective homebuyers estimate the total liquidity required to close an FHA loan. FHA loans are popular for their low down payment requirements, but many buyers forget that closing costs and mortgage insurance premiums significantly impact the final "cash to close" figure.
By entering your purchase price and expected percentages, you can quickly see the difference between your down payment and the actual out-of-pocket cash needed on signing day.
- Home Purchase Price
- The total agreed-upon sales price of the property.
- Down Payment %
- FHA requires a minimum of 3.5% for credit scores of 580 or higher, and 10% for scores between 500 and 579.
- Est. Closing Costs %
- Usually ranges from 2% to 5% of the purchase price. This includes origination fees, title insurance, and appraisals.
- Upfront MIP (UFMIP)
- The Federal Housing Administration charges a standard 1.75% upfront premium. Most borrowers finance this into the loan.
How It Works
Calculating the cash required for an FHA loan involves summing two distinct categories of costs. The formula used by our calculator is:
Total Cash = Down Payment + Closing Costs + (UFMIP if not financed)
- Down Payment: Minimum of 3.5% of the sales price.
- Closing Costs: Third-party fees, taxes, and lender charges.
- UFMIP: A one-time 1.75% fee that can be paid upfront or added to the mortgage balance.
Calculation Example
Example: A buyer is purchasing a home for $250,000 with a 585 credit score and choosing to finance the UFMIP.
Step-by-step solution:
- Down Payment: $250,000 × 3.5% = $8,750
- Base Loan Amount: $250,000 – $8,750 = $241,250
- Closing Costs (Est 3%): $250,000 × 3% = $7,500
- UFMIP (1.75%): $241,250 × 1.75% = $4,221.88 (Added to loan)
- Total Cash Needed: $8,750 (DP) + $7,500 (CC) = $16,250
- Final Loan Amount: $241,250 + $4,221.88 = $245,471.88
Common Questions
Can the seller pay my closing costs?
Yes. FHA guidelines allow sellers to contribute up to 6% of the purchase price toward the buyer's closing costs, prepaid expenses, and discount points. This can significantly reduce the cash needed at closing, sometimes leaving the buyer to pay only the down payment.
Is the 3.5% down payment always required?
If your credit score is between 500 and 579, the FHA requires a 10% down payment. Scores of 580 or higher qualify for the 3.5% minimum. Additionally, some down payment assistance (DPA) programs can provide grants or secondary loans to cover this cost.
What is included in FHA closing costs?
Typical FHA closing costs include the appraisal fee, credit report fee, lender origination fees, title search, title insurance, government recording fees, and initial escrow deposits for taxes and homeowners insurance.