| Scenario | Purchase Price | Loan Amount | Points | Origination | Closing Costs | Prepaids/Reserves | Credits | Cash to Close |
|---|---|---|---|---|---|---|---|---|
| Starter home | $250,000 | $225,000 | 0.50% | 1.00% | $5,150 | $3,900 | $2,000 | $31,050 |
| Move-up home | $450,000 | $360,000 | 1.00% | 1.00% | $7,950 | $5,250 | $4,500 | $97,700 |
| Refinance | — | $300,000 | 0.00% | 0.75% | $4,600 | $2,150 | $1,500 | $5,250 |
- Origination fee = (Origination % ÷ 100) × Loan Amount.
- Discount points = (Points % ÷ 100) × Loan Amount.
- Prepaid interest = Daily Interest × Days Remaining in Month.
- Daily Interest = (Loan Amount × Rate% ÷ 100) ÷ Day‑count basis (360 or 365).
- Monthly taxes/insurance = Annual amount ÷ 12.
- Prepaids/Reserves = Interest + Prepaid insurance + Prepaid taxes + Escrow months.
- Cash to close = Down Payment + Closing Costs + Prepaids/Reserves − Credits.
- Enter purchase price and loan amount, or override down payment directly.
- Fill in lender fees and third‑party costs from your estimates.
- Set closing date and pick a day‑count basis for prepaid interest.
- Enter annual taxes, annual insurance, and escrow months needed.
- Add credits and earnest money to reduce the cash to close.
- Press Calculate to view results above the form, then export.
Cash to close is a structured total
Cash to close combines the down payment, settlement fees, and upfront funding items. In this tool, closing costs group lender fees, third‑party services, government charges, plus any custom adds. Prepaids and reserves cover interest, insurance, taxes, and HOA cushions. Credits then lower what you bring. Purchase price minus loan amount estimates down payment; override it if gifts, grants, or assistance change your cash.
Lender fees are often percentage driven
Origination and discount points scale with the loan amount. For example, a $280,000 loan with 1.00% origination equals $2,800, and 0.75% points equals $2,100. Flat fees like underwriting and processing are added on top, so small loans can show higher effective percentages. Zero points can lower cash needed, but may raise rate; export results to compare scenarios quickly.
Prepaids and reserves can surprise borrowers
Prepaid interest is estimated from closing to month end. Daily interest equals (Loan Amount × Rate) ÷ day‑count basis. At 6.75% on $280,000, daily interest is about $51.78 using 365, or $52.50 using 360. If 16 days remain, prepaid interest is roughly $828–$840. The include‑closing‑day toggle changes interest by one day. Earlier closings usually increase interest days and may increase reserves.
Taxes and insurance shape the escrow math
Property taxes and insurance are converted to monthly amounts for both prepaids and escrow reserves. Using a 1.20% tax rate on a $350,000 price yields $4,200 yearly, or $350 monthly. If your lender collects 3 tax months and 2 insurance months, reserves equal 5 monthly payments plus any HOA months you set. Select prepaid insurance months to match lender requirements, often a full 12.
Credits and deposits reduce the final check
Seller credits, lender credits, and earnest money deposits reduce cash to close dollar‑for‑dollar. Treat earnest money as funds already paid, not a new cost. If you add custom items marked as credits, they also reduce the total. This makes it easy to compare offers where a higher rate provides a lender credit. Large credits can push cash to close near zero, depending on limits.
Does this replace an official closing disclosure?
No. It is a planning estimate based on your inputs. Final amounts can change due to prorations, lender rules, title charges, local recording fees, and timing. Use it to compare scenarios and prepare budgets.
How is prepaid interest calculated here?
Prepaid interest equals daily interest times the remaining days in the month. Daily interest is (loan amount × annual rate) divided by 360 or 365, based on your selection. You can also include the closing day.
What if I’m refinancing and don’t have a purchase price?
Enter 0 for purchase price and use the loan amount, fees, and prepaids. Down payment can stay at 0. If you want taxes estimated by rate, enter an appraised value as the purchase price for the calculation.
Should I include owner title insurance?
Owner coverage is optional in many transactions. If you plan to purchase it, enter the quoted premium. If it is paid by the seller in your contract, treat it as a seller-paid item or a credit.
Why do escrow months vary by lender?
Lenders set initial escrow cushions based on servicer policy, payment cycles, and local tax due dates. Higher cushions help avoid escrow shortages, especially when taxes are paid semiannually. Ask your lender for the exact months collected.
Can I add unusual fees or credits?
Yes. Use Custom Items to add special fees, courier charges, or rate-lock costs. If an item reduces what you pay, set it as a credit so it subtracts from cash to close and exports correctly.