Know the common charges
Depending on the transaction, the closing worksheet may include lender origination charges, discount points, appraisal, title and settlement fees, recording charges and other third-party costs. Prepaid insurance, tax prorations and starting escrow deposits are not necessarily lender fees but they do affect funds needed.
- Ask for a written line-item estimate
- Separate loan fees from prepaids and escrows
- Compare lender offers on matched rates and lock periods
Account for deposits and credits correctly
Earnest money is generally credited toward the purchase at settlement rather than paid twice. Seller concessions can cover only certain allowable costs and depend on the loan program and transaction. If the seller's credit exceeds eligible charges, you generally cannot simply take the excess as cash.
- Track earnest money already sent to escrow
- Request a concession analysis before writing the offer
- Do not assume a credit can substitute for down payment
Avoid last-minute funding problems
A preliminary Loan Estimate and final Closing Disclosure serve different purposes, and figures may change for legitimate reasons as the transaction progresses. Your lender will document the funds you have available and the settlement agent will reconcile the closing figures.
- Keep traceable documentation for deposits and gifts
- Do not move large funds without telling your lender
- Ask early about insurance, taxes and HOA or condo documents
Estimate a cash-to-close starting point
Try your own assumptions. Closing costs and seller credits are illustrative, not program quotes or guarantees.
Down payment $10,500 + assumed other closing costs $9,000 − seller credit $5,000 − deposit $4,000. Earnest money counts toward cash already paid. Not a Loan Estimate. Does not include loan-specific adjustments, all reserves, unknown repair costs or down-payment assistance. Credits may not cover a down payment and may have limits.
Official information
Terms, loan rules, funding and eligibility can change. These references are for education; always confirm the current written terms with the appropriate agency and lender.
CFPB homebuying resources ↗