Cash to close is the total amount of money you need to bring to the closing table to complete your home purchase.
It equals: down payment + closing costs + prepaid items - seller concessions - earnest money deposit already paid.
On a 00K home with 3% down: down payment K, closing costs K-2K, minus concessions and earnest money. Total cash to close typically 0K-0K.
Calculation Formula
Cash to Close = Purchase Price - Loan Amount + Total Closing Costs - Seller Concessions - Earnest Money Deposit + Prepaids. Your lender provides this number on the Closing Disclosure.
Example Breakdown
00K home, 5% down (5K), closing costs K, earnest money K, no concessions. Down payment 5K + closing K - earnest money K = 1K cash to close.
By Loan Type
FHA (3.5% down): 00K home, cash to close = ~0.5K down + K costs - K EM = ~6.5K. VA (zero down): ~K costs - K EM = ~K. Conventional (5% down): ~5K + K - K = ~1K.
How to Reduce
Reduce cash to close by: requesting seller concessions, accepting lender credits, using down payment assistance programs, or negotiating a higher purchase price with more concessions.
DPA Impact
Down payment assistance of 5% reduces cash to close by 5K on a 00K home. Explore DPA programs before assuming you need to save the full amount.
Cash to Close Tips
Your earnest money deposit comes back to you at closing (applied to your cash to close). If you put K in earnest, that's K less you need at closing.