Cash to Close: How much do I need to bring to closing?

August 9, 2019
Author: New England Home Mortgage

The excitement of buying a home is often paired with some stress of figuring out all of the costs associated with it.

Closing costs, along with your down payment, can vary depending on your loan and your financial situation. On top of that, you may be able to buy points from lenders or negotiate for credits with sellers, which all changes the amount you will owe on closing day. These additions and subtractions can make it difficult to determine the exact amount you will need to bring the day you close on your new home.

Cash to close is the total amount you need for closing, including the down payment amount and all other costs associated with the loan.

Down Payment

With decent to good credit, most loans make it possible to buy a home with less than 20% as a down payment. Down payments can go as low as 3% with a conventional loan and 3.5% with an FHA loan. For a $200,000 house, this means saving between $6,000 and $7,000 as a minimum for the down payment on the house.

Closing Costs

Along with the down payment, you must have additional cash ready for closing day. Closing costs can be another 2-5% of the sale price of the home. This would range between $4,000 and $10,000 for a $200,000 home, on top of the down payment.

Closing costs can include:

  • Appraisal and home inspection cost
  • Title insurance
  • Homeowner’s insurance
  • Underwriting and processing fees
  • Broker fees
  • Escrow fee
  • Property Taxes
  • Attorney fees

Determining your Total Cash to Close

The exact amount you need, for both closing costs and your down payment, will be outlined in your Closing Disclosure, which is a document that you will receive at least three days before your closing. To be prepared for the total number, speak with your mortgage lender to get an estimate about how much you will owe in closing costs. When you do get your Closing Disclosure, review the final expenses, and ask questions about any changes that you don’t understand.

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