Down payment, closing costs, and cash to close

The down payment is only one piece

Your down payment is the part of the purchase price you pay rather than borrow. It affects the loan amount and can affect program options, pricing, and mortgage insurance. It is separate from closing costs, prepaid expenses, moving costs, and the money you keep in reserve.

Know the other upfront expenses

• Loan and settlement charges: items such as lender fees, appraisal, title, escrow, and recording.
• Prepaid expenses: items such as homeowners insurance and interest collected for a period around closing.
• Initial escrow funding: money set aside for future tax and insurance bills when an escrow account is required.

Exact charges depend on the loan, property, timing, and providers. Ask which costs are already paid, which remain due, and which can change. Avoid treating a general percentage as your final budget.

Understand cash to close

Cash to close accounts for the down payment and closing charges, then adjusts for deposits already paid, credits, and other transaction amounts. Earnest money is generally credited in the closing calculation; it should not be counted twice. The Loan Estimate provides an estimate and the Closing Disclosure shows the final calculation for the transaction.

Ask how credits and assistance work

Seller credits depend on negotiation and program limits. Lender credits may exchange lower upfront costs for a higher interest rate. Assistance can be a grant, a repayable loan, or another structure; the name alone does not tell you the obligation.

For example, CalHFA MyHome is a deferred-payment junior loan, rather than simply free cash. Ask whether a program is currently available through a participating lender, what eligibility and education rules apply, and what triggers repayment. Availability is not a promise of approval.

Keep a cushion after closing

Set aside money for moving, repairs, emergencies, and lender-required reserves. A larger down payment is not automatically a better decision if it leaves you with too little cash. Ask for two complete scenarios showing payment, cash to close, mortgage insurance, and remaining savings.

For a first look at monthly affordability, use Start here. For a property-specific upfront budget, request a conversation with the team.