Guide · Homebuying
Cash to close: what it is and how to estimate it
The check you bring to closing is bigger than your down payment. Here is every piece of it on a $400,000 purchase, and the moves that shrink it.
By the CalcLedger editorial team · Updated September 2026 · 5 min read · Examples use illustrative rates · How we calculate
On this page
Key takeaways
- Cash to close = down payment + closing costs + prepaid items + escrow deposit − earnest money − credits.
- On a $400,000 home with 10% down, the total in our example is about $46,300, not the $40,000 down payment alone.
- Prepaids and escrow (about $4,200 here) are not fees, but they are cash you must bring.
- Your lender must give you the final figure on the Closing Disclosure at least three business days before closing.
Buyers budget carefully for the down payment and are then surprised by the final number. "Cash to close" is the actual amount you wire or bring to the closing table, and it appears on page 2 of your Loan Estimate under "Calculating Cash to Close" and again on your final Closing Disclosure. It pulls together four groups of money, then subtracts what you have already paid or been given.
A worked example: $400,000 home, 10% down
| Item | How it is figured | Amount |
|---|---|---|
| Down payment | 10% of $400,000 | $40,000 |
| Lender fees and points | 1% of the $360,000 loan | $3,600 |
| Title, appraisal, recording and other fees | Estimate; varies by state | $3,500 |
| Prepaid interest | 15 days at 6.5% on $360,000 | $962 |
| First year of homeowners insurance | Paid in advance | $1,800 |
| Escrow deposit | 3 months of property tax + 2 months of insurance | $1,400 |
| Minus earnest money already paid | Deposited when your offer was accepted | −$5,000 |
| Cash to close | $46,262 |
Illustrative figures: property tax 1.1% a year, insurance $1,800 a year, no seller or lender credits. Try your own numbers in the cash to close calculator.
The four parts of cash to close
1. Down payment. The part of the price you do not borrow. Conventional loans allow as little as 3% for some buyers, FHA loans 3.5%, and VA and USDA loans can require none. Less than 20% down on a conventional loan usually means PMI.
2. Closing costs. Lender charges (origination fees and any discount points) and third-party services such as the appraisal, title insurance, settlement, recording and, in some states, transfer taxes. Together these often run about 2% to 6% of the loan. Our guide to mortgage closing costs breaks them down.
3. Prepaid items. Costs paid in advance: interest from your closing date to the end of that month, and usually the first year of homeowners insurance.
4. Initial escrow deposit. If your lender pays your property tax and insurance through an escrow account, it collects a cushion of a few months up front so the account never runs short.
From the total, subtract your earnest money deposit, which you paid when your offer was accepted, and any seller credits or lender credits.
Why your closing date matters
Prepaid interest covers the days from closing to the end of the month, because your first mortgage payment is not due until the first day of the second month after closing. On a $360,000 loan at 6.5%, each day costs about $64. Closing on the last day of the month means about one day of prepaid interest; closing on the first means about 30 days, roughly $1,900. It is not money lost, since mortgage interest is paid in arrears, but it changes how much cash you need on the day.
Ways to lower your cash to close
- Negotiate seller credits toward your closing costs, within the limits your loan program allows.
- Compare Loan Estimates from several lenders; origination charges and points vary widely.
- Shop the services you are allowed to shop for, which your Loan Estimate lists.
- Consider a lender credit: a slightly higher rate in exchange for the lender paying part of your costs. It lowers cash now at the price of a higher payment.
- Look into down payment assistance programs from your state or city housing finance agency.
Protect the money you wire
Closing is a favorite target for wire fraud. Criminals send fake emails that look like they come from your title company or agent with "updated" wiring instructions. Before sending money, call your title or escrow company at a phone number you already know, not one in the email, and confirm the instructions. Never change wiring details based on an email alone.
Timeline
You get a Loan Estimate within three business days of applying, and the final Closing Disclosure at least three business days before closing. Compare the two: the cash to close should be close to the estimate, and the Closing Disclosure explains any changes. Keep your funds in an account you can wire or draw a cashier's check from, and avoid large unexplained deposits or new debt before closing, since lenders recheck your finances.
Frequently asked questions
Can closing costs be rolled into the loan?
On a purchase, usually not directly, although seller credits and lender credits can cover them. On a refinance, costs are often added to the new loan.
Is earnest money part of the down payment?
Yes, it is credited toward your cash to close, which is why it is subtracted in the calculation.
Do I get the escrow deposit back?
It stays in your escrow account and is used to pay your property tax and insurance. If you sell or refinance, any remaining balance is refunded.
How much cash should I have beyond cash to close?
Lenders may require reserves, and moving and repairs cost money too. Many buyers keep a separate emergency fund after closing.
Estimate your own figure with the cash to close calculator, and plan your savings with the down payment savings calculator.
Sources
- Consumer Financial Protection Bureau: Loan Estimate explainer
- Consumer Financial Protection Bureau: Closing Disclosure explainer
- Consumer Financial Protection Bureau: Buying a house
Rules, limits and program details are checked against these official sources. Example numbers are calculated by CalcLedger with the formulas on our how we calculate page. Read our editorial policy.
Ad placement — in-content unit