RightFiguresCash due and cash already paid
Additional cash due is:
down payment + closing costs + prepaids and reserves − seller credits − lender credits − earnest money
The loan amount is the purchase price minus the down payment. It is shown so the financed price is visible, and it is not added to the cash due. The down payment is the full down payment. The earnest deposit is subtracted once, as money already paid.
Closing costs are the lender fees, appraisal and inspection, title and escrow, buyer recording and transfer charges, and other buyer expenses. Prepaids and reserves are prepaid taxes and insurance plus initial escrow reserves. Type every amount. Nothing is looked up from a county or a lender’s fee schedule.
Which credits can offset which costs
Lender credits can offset closing costs only. They cannot offset prepaids, reserves or the down payment. If the lender credit is larger than the closing costs, the result is rejected.
Seller credits can offset the closing costs that remain after the lender credit, plus prepaids and reserves. They cannot offset the down payment. If the seller credit is larger than that remainder, the result is rejected. The excess is not described as cash back.
A negative additional-cash figure can occur only when the earnest deposit is larger than the commitment. The heading is an earnest-money refund. It returns part of the deposit already paid. It is not a seller or lender payment, and it cannot exceed the deposit.
A loan program or a settlement statement can set a lower credit limit, or can tie a credit to one charge. This page does not apply those program rules. The Closing Disclosure explainer is where a lender’s cash-to-close figure is listed. This calculator does not prepare that form.
Financed fees
Every fee field is cash due at closing. A fee the lender adds to the note is left out of the fee fields and is also left out of the loan amount shown here. Reducing the down payment is a different choice: it finances more of the purchase price. It does not represent a fee added on top of that price. If a fee was financed, use the promissory note for the loan amount. The figure on this page will be lower than that note.
A $94,900 example
Price $450,000. Down payment $90,000. Lender fees $4,500. Appraisal and inspection $800. Title and escrow $2,500. Recording and transfer $1,500. Other expenses $600. Prepaids $3,200. Reserves $1,800. Earnest money $5,000. Seller credit $4,000. Lender credit $1,000.
Closing costs are $9,900.00. The $1,000 lender credit is within them. Prepaids and reserves are $5,000.00, so the seller-credit cap is $13,900.00 and the $4,000 seller credit is within it. The loan is $360,000.00. Total cash commitment is $99,900.00. Cash due at closing is $94,900.00.
A $10,000 down payment with a $12,000 deposit and no fees or credits still commits $10,000.00. The extra $2,000.00 is an earnest-money refund, not a credit from the seller.
Sources & review
- Closing disclosure explainer — Consumer Financial Protection Bureau
- What fees or charges are paid when closing on a mortgage and who pays them? — Consumer Financial Protection Bureau
- Mortgage key terms — Consumer Financial Protection Bureau
Last reviewed: . The formula is reproduced above so you can check the math independently.
Educational estimate only. A Closing Disclosure can apply a credit differently, and a financed fee belongs on the promissory note.