Buyer guide
Cash to close explained
Cash to close is the estimated amount a buyer needs to bring to settlement. It usually includes the down payment plus closing costs, prepaid expenses, escrow deposits, and any adjustments or credits shown on the closing documents.
Cash to close is not just the down payment
Many buyers focus on the down payment first, but the amount needed at closing is often higher. Lender fees, title services, recording fees, appraisal fees, inspections, prepaid homeowners insurance, prepaid interest, property tax deposits, and escrow reserves can all add to the funds needed to complete the purchase.
Seller credits, lender credits, earnest money deposits, and prorations can move the number in the other direction. A useful estimate should show the pieces separately so you can see whether a change came from the loan, title fees, prepaid expenses, or a negotiated credit.
Example cash to close estimate
A buyer purchasing a $500,000 home with a $100,000 down payment may still need another $10,000 to $12,000 for estimated closing costs and prepaid expenses. In that scenario, total cash to close may be about $110,000 to $112,000 before accounting for earnest money already deposited, seller credits, or lender credits.
What to verify before closing
- Compare your calculator estimate with your lender's Loan Estimate.
- Ask whether taxes, insurance, and escrow reserves are current or placeholders.
- Confirm seller credits and lender credits are shown correctly.
- Review title charges and services you can shop for.
- Use the Closing Disclosure for final figures before wiring money.