When obtaining a home loan, especially one backed by the Federal Housing Administration (FHA), you'll encounter closing costs. These are fees charged by the lender and third-party service providers involved in the mortgage process. FHA loans, designed to make homeownership more accessible, have specific closing cost components, including mortgage insurance premiums. This calculator helps you estimate these costs based on the loan amount and various fees.
Key FHA Closing Cost Components:
Upfront Mortgage Insurance Premium (UFMIP): FHA loans require this premium to protect lenders against borrower default. It's typically paid at closing and is a percentage of the loan amount. For loans originated after June 3, 2019, the UFMIP is 1.75% of the loan amount.
Annual Mortgage Insurance Premium (MIP): This is paid monthly as part of your mortgage payment. A portion of the first year's MIP is often paid at closing. The rate varies based on the loan term and loan-to-value ratio but commonly ranges from 0.45% to 0.85% annually.
Lender Origination Fee: This fee covers the lender's administrative costs for processing your loan. It's often expressed as a percentage of the loan amount, typically around 1%.
Appraisal Fee: Lenders require an appraisal to determine the fair market value of the property. This fee usually ranges from $300 to $700.
Credit Report Fee: Covers the cost of pulling your credit reports from the major credit bureaus. Typically between $30 and $50.
Title Insurance and Settlement Fee: Protects the lender (and optionally, the buyer) against title defects or claims. This can include fees for title search, examination, and the settlement service itself. Costs vary significantly by location.
Recording Fees: Charged by the local government to record the mortgage and deed in public records. Usually a few hundred dollars.
Prepaid Interest: Interest that accrues on your loan from the closing date to the end of the month. The number of days prepaid depends on your closing date.
Escrow/Impound Account Setup: Lenders often require you to deposit funds into an escrow account to cover future property taxes and homeowners insurance premiums. Typically, they'll ask for 2-6 months of property taxes and 2-6 months of homeowners insurance.
How the Calculator Works:
This calculator estimates your FHA closing costs by summing up the following:
Other Fees: Sum of Appraisal Fee, Credit Report Fee, Title Insurance and Settlement Fee, and Recording Fees.
Prepaid Interest: Calculated based on the daily interest rate and the number of prepaid days. Daily Interest Rate = (Loan Amount * (Interest Rate / 100)) / 365. Prepaid Interest = Daily Interest Rate * Prepaid Interest Days. (Note: An estimated interest rate needs to be assumed for this calculation, or added as an input. For simplicity, we'll add a placeholder for it.)
Escrow Account Funds: This calculator includes an estimate for setting up the escrow account, typically requiring a few months of property taxes and homeowners insurance. This is approximated as (Annual Property Taxes / 12 * 3 months) + (Annual Homeowners Insurance / 12 * 3 months). This portion can vary significantly.
Disclaimer: This calculator provides an estimate only. Actual closing costs may vary. It is crucial to consult with your lender for a precise Loan Estimate (LE) which details all specific costs associated with your FHA loan. The interest rate is not an input here but is factored into the prepaid interest calculation using a common FHA rate.
function calculateClosingCosts() {
var loanAmount = parseFloat(document.getElementById("loanAmount").value);
var upfrontMIPPercent = parseFloat(document.getElementById("upfrontMIP").value);
var annualMIPFeePercent = parseFloat(document.getElementById("annualMIPFee").value);
var appraisalFee = parseFloat(document.getElementById("appraisalFee").value);
var creditReportFee = parseFloat(document.getElementById("creditReportFee").value);
var titleInsurance = parseFloat(document.getElementById("titleInsurance").value);
var recordingFees = parseFloat(document.getElementById("recordingFees").value);
var lenderOriginationFeePercent = parseFloat(document.getElementById("lenderOriginationFee").value);
var prepaidInterestDays = parseFloat(document.getElementById("prepaidInterest").value);
var annualPropertyTaxes = parseFloat(document.getElementById("propertyTaxes").value);
var annualHomeownersInsurance = parseFloat(document.getElementById("homeownersInsurance").value);
var resultDiv = document.getElementById("result");
var errorMessage = document.getElementById("error-message");
var resultValue = document.getElementById("result-value");
// Clear previous error messages and hide result
errorMessage.textContent = "";
resultDiv.style.display = "none";
// Input validation
if (isNaN(loanAmount) || loanAmount <= 0) {
errorMessage.textContent = "Please enter a valid FHA loan amount.";
resultDiv.style.display = "block";
return;
}
if (isNaN(upfrontMIPPercent) || upfrontMIPPercent < 0) {
errorMessage.textContent = "Please enter a valid Upfront MIP percentage.";
resultDiv.style.display = "block";
return;
}
if (isNaN(annualMIPFeePercent) || annualMIPFeePercent < 0) {
errorMessage.textContent = "Please enter a valid Annual MIP percentage.";
resultDiv.style.display = "block";
return;
}
if (isNaN(appraisalFee) || appraisalFee < 0) {
errorMessage.textContent = "Please enter a valid Appraisal Fee.";
resultDiv.style.display = "block";
return;
}
if (isNaN(creditReportFee) || creditReportFee < 0) {
errorMessage.textContent = "Please enter a valid Credit Report Fee.";
resultDiv.style.display = "block";
return;
}
if (isNaN(titleInsurance) || titleInsurance < 0) {
errorMessage.textContent = "Please enter a valid Title Insurance and Settlement Fee.";
resultDiv.style.display = "block";
return;
}
if (isNaN(recordingFees) || recordingFees < 0) {
errorMessage.textContent = "Please enter a valid Recording Fees.";
resultDiv.style.display = "block";
return;
}
if (isNaN(lenderOriginationFeePercent) || lenderOriginationFeePercent < 0) {
errorMessage.textContent = "Please enter a valid Lender Origination Fee percentage.";
resultDiv.style.display = "block";
return;
}
if (isNaN(prepaidInterestDays) || prepaidInterestDays < 0) {
errorMessage.textContent = "Please enter a valid number of Prepaid Interest Days.";
resultDiv.style.display = "block";
return;
}
if (isNaN(annualPropertyTaxes) || annualPropertyTaxes < 0) {
errorMessage.textContent = "Please enter a valid Annual Property Taxes amount.";
resultDiv.style.display = "block";
return;
}
if (isNaN(annualHomeownersInsurance) || annualHomeownersInsurance < 0) {
errorMessage.textContent = "Please enter a valid Annual Homeowners Insurance amount.";
resultDiv.style.display = "block";
return;
}
// Calculations
var calculatedUFMIP = loanAmount * (upfrontMIPPercent / 100);
var calculatedAnnualMIP = loanAmount * (annualMIPFeePercent / 100);
var calculatedLenderOriginationFee = loanAmount * (lenderOriginationFeePercent / 100);
// Estimate interest rate for prepaid interest calculation (common FHA rate assumption)
var estimatedInterestRate = 6.5; // Assuming 6.5% for calculation purposes
var dailyInterestRate = (loanAmount * (estimatedInterestRate / 100)) / 365;
var calculatedPrepaidInterest = dailyInterestRate * prepaidInterestDays;
// Estimate escrow setup (e.g., 3 months of taxes and insurance)
var escrowSetupTaxes = (annualPropertyTaxes / 12) * 3;
var escrowSetupInsurance = (annualHomeownersInsurance / 12) * 3;
var totalEscrowSetup = escrowSetupTaxes + escrowSetupInsurance;
var totalClosingCosts = calculatedUFMIP + calculatedAnnualMIP + appraisalFee + creditReportFee + titleInsurance + recordingFees + calculatedLenderOriginationFee + calculatedPrepaidInterest + totalEscrowSetup;
// Display result
resultValue.textContent = "$" + totalClosingCosts.toFixed(2);
resultDiv.style.display = "block";
}