First-time buyers: closing costs versus cash to close

Buying your first home? Two numbers can sound alike but mean different things: closing costs and cash to close.

Closing costs are the upfront costs connected with getting the mortgage and transferring ownership. They can include lender charges, recording and government fees, prepaid interest, initial escrow, and other services. They are separate from your down payment. As a rough early estimate, the CFPB says closing costs—not including the down payment—often range from 2% to 5% of the purchase price, but your actual amount depends on the home, loan, lender, and location. ¹

Cash to close is the amount you actually need to pay at closing. It can include your down payment and closing costs, then subtract deposits you already paid, seller or lender credits, and other adjustments. So it is not automatically the same as your total closing costs.

Before closing, review your Closing Disclosure. Your lender generally must provide it at least three business days before closing. Compare the closing costs and cash-to-close figures with your Loan Estimate, and ask your lender or closing agent about anything unexpected. ²

Want to understand the numbers for your situation? Gather your Loan Estimate and Closing Disclosure, then schedule a neutral educational conversation with a licensed mortgage professional. This is general information—not a loan offer or approval.

Important notes

• No rate, payment, savings, product-eligibility, approval, closing-speed, or outcome promise is made. No specific loan program or assistance program is endorsed.
• The 2%–5% figure is a CFPB general estimate, not a quote or guarantee. Actual costs vary and may change.
• Use only a licensed/authorized professional and approved employer channels for individualized guidance. A public contact channel is not consent to contact.
• Never display borrower financial information, application data, loan documents, or credentials. Use a fictionalized document graphic only.