If you’re a first time homebuyer—or if it’s been a number of years since your last home sale—you may be hearing some unfamiliar terms. One of those terms may be “cash to close” or “cash at closing.” From context, you might think this refers to your closing costs.
You’d be mistaken, at least partially. One of the benefits to working with a Realtor® is that you’ll have experienced support throughout the home buying process. You’ll always know what everything in your contract means. You won’t have to worry about surprises.
Closing costs are the fees you’ll pay to close the sale of a home. The buyer assumes this expense unless the sale contract states otherwise. These fees include:
- Title company fees
- Escrow amounts for taxes and insurance
- Document recording fees
- Other lender fees according to your loan
In certain cases, there may be other fees included as well. For instance, if you are transferring money by wire, there could be a fee for that.
Your Cash to Close
With most mortgages, your lender requires you to make a down payment, usually a set percentage of the sale price. The rest of the sale price is the principal of your loan. This down payment, added to your closing costs, is the amount of cash you’ll need at closing. Your Realtor can provide you with a detailed summary of all your closing costs and your down payment amount.
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