Cash needed for closing may include your down payment, loan and settlement costs, prepaid items, and initial escrow funding, adjusted for deposits and applicable credits. The exact amount depends on the transaction.
Separate the categories
Down payment reduces the financed portion of the purchase. Closing costs cover applicable loan and settlement charges. Prepaid items and escrow funding relate to items such as interest, taxes, and insurance. These categories should not be collapsed into one vague percentage.
Review the written estimates
Ask which costs are fixed, estimated, or dependent on the closing date and other details. Compare the Loan Estimate and later closing disclosures, and ask your loan team about changes you do not understand.
Keep enough for life after closing
Moving costs, utilities, repairs, maintenance, and emergency savings may sit outside the closing statement. Plan for those alongside any reserves required by the lender.
Be careful with payment instructions
Verify wiring or payment instructions using a phone number you already know is legitimate. Do not trust a last minute email changing account details without independent verification.