Key Takeaways
- Closing costs are the charges for getting your mortgage and transferring ownership of a home.
- Cash to close is the total amount you need to bring to closing. It includes your closing costs and down payment, minus earnest money you’ve already paid, seller credits and other adjustments.
| Closing costs | Cash to close | |
| What it covers | Lender fees, third-party services, taxes, prepaid expenses and initial escrow deposits, minus lender credits | Closing costs plus your down payment, minus deposits, seller credits and other adjustments |
| Includes your down payment? | No | Yes, when buying a home |
Example: Cash to close vs. closing costs on a $400,000 home
Here’s a hypothetical example based on the CFPB’s explanation of how cash to close is calculated:
Let’s say you’re buying a $400,000 home with a $40,000 down payment and $12,000 in closing costs, including prepaid expenses and escrow deposits. You’ve already paid $5,000 in earnest money, and the seller is contributing $3,000 toward closing costs.
| Line item | Amount |
| Down payment | $40,000 |
| Closing costs | +$12,000 |
| Earnest money already paid | −$5,000 |
| Seller credits | −$3,000 |
| Total cash to close | $44,000 |
Your closing costs are $12,000, but your cash to close is $44,000 because it adds your down payment and subtracts your earnest money and seller credit.
This example is illustrative. Actual amounts depend on your loan and purchase details.
What is cash to close?
Cash to close is the amount you still need to pay at closing, on top of anything you’ve already paid. You typically pay it by cashier’s check or wire transfer.
Because cash to close includes several expenses and credits, it can change even when your lender’s fees stay the same.
Does cash to close include the down payment?
Yes. When buying a home, cash to close includes your down payment and closing costs, minus deposits, credits and other adjustments.
Your closing costs already include expenses such as prepaid interest, homeowners insurance, certain property taxes and your initial escrow deposit. Adding these expenses again would count them twice.
For a refinance, the calculation differs because there’s generally no down payment.
How to calculate cash to close
For a typical home purchase, use this formula:
Cash to close = Down payment + Closing costs − Earnest money − Seller credits ± Other adjustments
Closing costs should already account for applicable lender credits and prepaid expenses. For the exact calculation, check the seven lines in the “Calculating Cash to Close” table on page 2 of your Loan Estimate.
| Line on your Loan Estimate | Effect on cash to close |
| Total Closing Costs (J) | Adds closing costs, net of lender credits |
| Closing Costs Financed | Subtracts closing costs included in your loan |
| Down Payment/Funds from Borrower | Adds your contribution toward the purchase |
| Deposit | Subtracts earnest money already paid |
| Funds for Borrower | Subtracts loan funds paid to you, if any |
| Seller Credits | Subtracts applicable seller contributions |
| Adjustments and Other Credits | Adds or subtracts items such as prorated taxes and HOA dues |
How to check your Loan Estimate
- Open the “Calculating Cash to Close” table on page 2.
- Confirm Deposit matches your earnest money and check that agreed seller contributions appear as Seller Credits or seller-paid charges.
- Check Down Payment/Funds from Borrower against your expected contribution. For a straightforward purchase, this generally equals the sale price minus the loan amount. Other financing arrangements can affect the calculation.
- Ask your lender to explain any unexpected amount.
Where to find cash to close on your Loan Estimate and Closing Disclosure
Both forms show cash to close on page 1.
- Loan Estimate: Page 2 shows your estimated cash to close and its calculation.
- Closing Disclosure: The page 3 comparison shows estimated and final amounts, including the “Did this change?” column.
You must receive your Closing Disclosure at least three business days before closing. Regulation Z generally considers a mailed disclosure received three business days after mailing.
Why did my cash to close change?
Cash to close can change between your Loan Estimate and Closing Disclosure, even when lender fees stay the same.
Reasons can include:
- Prepaid interest: Changes depending on your closing date.
- Homeowners insurance, property taxes and escrow deposits: Updated premiums, tax information or payment schedules can affect these amounts.
- Seller credits and earnest money: Changes to negotiated credits or deposits affect what remains due.
- Property tax or HOA adjustments: You may owe the seller for expenses paid in advance or receive a credit for expenses you’ll pay later.
- Loan changes: A different loan amount or down payment can change the total.
Which closing costs can increase?
As explained by the CFPB, federal rules limit increases to certain closing costs:
- Costs that can’t increase without a permitted exception: Fees paid to your lender, mortgage broker or affiliates of either, required services you weren’t allowed to shop for, and transfer taxes.
- Costs capped at 10% collectively: Recording fees and certain required services from providers on your lender’s written list.
- Costs without a fixed increase limit: Prepaid interest, homeowners insurance, property taxes, initial escrow deposits, services your lender doesn’t require, and required services from unaffiliated providers you chose outside your lender’s written list, provided the original estimates were made in good faith.
A permitted change in your loan or application can allow affected estimates to increase. Points and lender credits may also change if your interest rate wasn’t locked, subject to applicable rules.
Can cash to close change after your Closing Disclosure?
Yes. If amounts change, your lender must provide a corrected disclosure at or before closing.
Under Regulation Z, a new three-business-day waiting period applies only if the APR becomes inaccurate beyond federal tolerances, the loan product changes or a prepayment penalty is added. Other changes don’t restart that waiting period.
What to do if your cash to close is higher than expected
Compare your Loan Estimate with your Closing Disclosure to identify what changed.
- Read the “Did this change?” column. Check which amounts increased and whether the difference is explained.
- Ask your lender why. If charges exceed federal limits without a permitted exception, you may be entitled to a refund of the excess.
- Compare lender charges. Look at Section A (Origination Charges) across Loan Estimates. These show what each lender charges to make the loan, including any discount points. The CFPB recommends comparing these costs when shopping for a mortgage.
- Verify payment instructions. Before wiring funds, follow the CFPB’s guidance to confirm the instructions with your closing agent in person or using a previously verified phone number, not one provided in an email.
Compare your mortgage costs with Tomo Mortgage
Tomo Mortgage charges zero lender fees on purchase and refi mortgages. Lender fees are only one part of cash to close. Third-party charges, taxes and government fees, prepaid expenses, escrow deposits, discount points you choose, your down payment and applicable program fees may still apply.
Tomo Mortgage, NMLS ID 2059741. Equal Housing Lender.