How much cash do you need to close?

Start with more than the down payment

Your cash to close may include your down payment, closing costs, prepaid expenses and initial escrow deposits. Earnest money you have already paid and eligible credits can reduce what you bring to settlement. A low- or no-down-payment loan does not automatically mean no cash is needed.

Know where the money goes

• Closing costs: lender, appraisal, title, settlement and recording charges, as applicable.
• Prepaid expenses: items such as homeowners insurance and interest covering the period before your first regular payment.
• Escrow deposits: funds collected for future property tax and insurance bills when an escrow account is required.
• Reserves: some programs require money left after closing. These funds are separate from the amount paid at settlement.

Review credits and money already paid

Seller credits, approved gift funds, lender credits and down payment programs may help, subject to program rules. Lender credits can involve a higher interest rate. Compare the overall terms, and tell Sam about deposits or fees already paid so the estimate can account for them.

Use your Loan Estimate to plan, then review the final cash-to-close amount on your Closing Disclosure. Property taxes, insurance, the closing date and other details can change the amount.

Prepare for settlement safely

Keep funds traceable and ask before moving large amounts between accounts. Verify wiring instructions directly with your settlement agent using a phone number you independently confirmed. Sam can help you work through a property-specific estimate.