Your down payment is only one part of the money needed to buy a home. Plan the fees, prepaid expenses and deposits together so the amount due at closing makes sense.
Closing Costs vs. Cash to Close
Closing costs cover the loan and property transfer. Cash to close combines the down payment and closing costs, then accounts for deposits, eligible credits and other adjustments. An earnest-money deposit already paid is usually credited toward what you owe; it is not another down payment.
Use the cash-to-close calculator for an early budget. Adam can replace the allowances with an estimate for your loan and property.
What Goes Into the Estimate?
Costs depend on the property, loan and closing date. Separate these categories when reviewing your numbers:
- Loan and settlement services: lender charges, appraisal, title and other services that apply.
- Government charges: recording and transfer taxes where applicable.
- Prepaid expenses: amounts collected for items such as insurance or interest around closing.
- Initial escrow: funds that establish an account for future tax and insurance bills.
- Program charges: any upfront mortgage insurance or guarantee fee, including whether it is financed or paid in cash.
Ways to Plan Your Upfront Cash
Ask Adam whether eligible seller credits, gift funds or down payment assistance could fit your loan. Each has documentation and use requirements. A seller credit is part of the negotiated contract, not money you can automatically count on.
A lender credit may reduce the amount due now in exchange for a higher interest rate. Review the payment and total cost along with the upfront savings. Assistance may involve a second loan or repayment conditions.
- Keep your reserve and moving budget separate from money earmarked for closing.
- Ask which expenses may be paid before closing.
- Review credits with Adam before including them in an offer.
Prepare for Closing Day
Review the Closing Disclosure with Adam. Check your loan terms, monthly payment, credits and cash to close against the most recent Loan Estimate, and ask for an explanation of changes.
Confirm the payment method with your settlement provider. Before wiring money, call a previously verified number to confirm the instructions. Do not rely on an unexpected email or text announcing a new account.
Questions Buyers Ask
Are the down payment and closing costs the same?
No. The down payment goes toward the purchase price. Closing costs pay for the loan, settlement and related expenses. Your cash-to-close total accounts for both, plus deposits, credits and adjustments.
Can a ZIP code tell me the exact closing costs?
No. ZIP-based data on this site estimates area property taxes. Actual closing costs depend on your loan, property, contract, providers and closing date.
Can assistance cover closing costs?
Some programs allow it. Ask Adam which expenses the specific assistance program can cover, how it is repaid and how it affects the first mortgage.
Put the Guide to Work
Official Sources
Rules and funding can change. Confirm current requirements before relying on a program.