What is cash to close?
Cash to close is the amount the buyer must provide to complete the transaction after accounting for the buyer's equity contribution, closing costs, prepaids and prorations, less earnest money and other credits already available to the buyer.
Cash to close versus down payment
The down payment is only one part of the buyer's closing funds. Cash to close can also include lender charges, title or settlement fees, attorney fees, prepaid interest, insurance, escrow deposits, government charges and other adjustments. Seller and lender credits can reduce the amount the buyer must bring.
How the calculator handles the loan
The estimated down payment is purchase price minus loan amount. If the loan amount is greater than the purchase price, the calculator flags the input so it can be reviewed rather than treating a negative down payment as a normal result.
Buyer cash-to-close FAQ
Is cash to close the same as the down payment?
No. The down payment is one component. Cash to close can also include lender fees, settlement charges, prepaids, escrow deposits, government fees and prorations, reduced by earnest money and credits.
Does earnest money reduce cash to close?
Generally, a deposit already credited to the buyer reduces the remaining funds needed at closing. Enter only the amount that will actually be credited on the settlement figures.
Why can lender credits change the result?
Lender credits can offset eligible closing charges, which can reduce the cash the buyer must provide. The lender's final disclosure controls the actual credit.