How Much Cash Do I Need to Buy a Home?

When you’re budgeting for a home, plan for money you may spend before closing and the amount you’ll still owe on closing day.

What you may pay before closing

• Earnest money deposit. Your purchase agreement sets the amount and due date. If the sale closes, the deposit generally counts toward what you owe at closing. Check the agreement for when the deposit can be refunded.
• Inspections and other upfront costs. Ask when inspections, any specialty tests, and the appraisal are due. Confirm which items you’ll pay upfront and which will appear on your closing statement.

What you may owe on closing day

Start with the down payment and closing costs, including applicable prepaid items and initial escrow deposits. Subtract your credited deposit, any credits that apply, and other amounts already paid and reflected in the estimate. Adjustments can change the final figure.

Example. On a $350,000 home, a 10% down payment is $35,000. If closing costs and prepaids total $8,000 and you’ve already paid a $5,000 deposit that will be credited, you’d bring about $38,000 at closing, assuming no other credits or adjustments. Budget separately for any inspection fees you pay upfront.

Use the Estimated Cash to Close line on your Loan Estimate while you’re planning. Before closing, compare it with the Cash to Close line on your Closing Disclosure. Ask your lender or closing agent about any changes. See the CFPB’s guide to reviewing closing documents.