Cash to Close

It helps to think in three layers. There is the cash to buy (your down payment), the cash to close (down payment plus closing costs plus prepaids, less any credits), and the cash to survive year one (reserves for repairs, furnishing, and the unexpected). Buyers often plan only for the first and get surprised by the second.

Cash to close is the figure your loan estimate and closing disclosure pin down. Lender or seller credits can reduce it, while prepaids and settlement fees push it up. Underestimating it is common because the down payment dominates attention, yet closing costs and prepaids can add several thousand dollars. Knowing all three layers keeps a purchase from draining every dollar you have. Actual amounts vary by lender, loan, and location.