Cash to close is the total you bring to the closing table: the down payment, plus closing costs, plus prepaids, minus every credit that comes your way. Most buyers guess it's the down payment and stop there. In practice, seller credits, gifts and FHA 100% financing can bring the real number down to a few thousand dollars, sometimes less. The cash to close calculator adds it up for any price, and this guide shows where each dollar goes.
What makes up cash to close
| Piece | What it is | Who can pay it |
|---|---|---|
| Down payment | Your share of the price | You, a gift, or a down payment assistance second |
| Closing costs | Lender, appraisal, title, settlement, recording and Florida taxes on the loan | You, the seller (within the cap), a gift |
| Prepaids | First year of homeowners insurance, prepaid interest, the opening escrow deposit | You, the seller (within the cap), a gift |
| Credits | Seller concession, tax proration, your earnest money deposit | Subtracted from the total |
Florida closing costs worth knowing
Florida charges two taxes on the mortgage itself. Documentary stamp tax on the note is 35 cents per $100 of the loan, and the nonrecurring intangible tax is 2 mills, or 0.2% of the loan. On a $343,660 loan that's about $1,890 together. Title insurance, the settlement fee, recording and the lender's own fees make up the rest.
Prepaids and escrow
Prepaids are costs of owning the home that get paid up front. You'll pay the first year of homeowners insurance, interest from the closing date to the end of that month, and an opening deposit into the escrow account that pays your taxes and insurance going forward.
Florida property taxes are paid in arrears, once a year for the year just ended. At closing, the seller credits you their share of the current year's taxes, since you'll be the one paying that bill. That proration credit lowers your cash to close and isn't counted against the seller concession limit.
Down payment by program
| Program | Minimum down payment |
|---|---|
| FHA, 580 score and up | 3.5% |
| FHA, 500 to 579 score | 10% |
| FHA 100% financing | $0 (a down payment assistance second covers the 3.5%) |
| VA | $0 |
| USDA | $0 |
| Conventional, single-family, first-time buyer programs | 3% |
| Conventional, 2 to 4 units | 5% |
FHA 100% financing is how a lot of buyers skip saving for the down payment. It pairs a 96.5% FHA first mortgage with a down payment assistance second that covers the 3.5%, so you bring $0 for the down payment itself. The FHA 100% financing guide covers how the second works.
Seller concession caps by program
A seller concession (lenders also call it an interested party contribution) is money the seller, builder or another party to the deal puts toward your costs. Every program caps it, and none of them let it pay your down payment.
| Program | Cap | What it can pay |
|---|---|---|
| FHA | 6% of the sales price | Closing costs, prepaids, discount points, the upfront mortgage insurance premium |
| VA | Normal closing costs and discount points, plus up to 4% of the reasonable value in concessions | Concessions can pay the VA funding fee, prepaid taxes and insurance, and payoff of your debts |
| Conventional, less than 10% down | 3% | Closing costs and prepaids |
| Conventional, 10% up to 25% down | 6% | Closing costs and prepaids |
| Conventional, 25% or more down | 9% | Closing costs and prepaids |
| Conventional, investment property | 2% | Closing costs and prepaids |
| USDA | 6% of the sales price | Closing costs, prepaids, discount points |
Fannie Mae measures its cap against the lower of the price or the appraised value. VA measures concessions against the reasonable value on the VA appraisal, and the seller's payment of normal closing costs doesn't count toward the 4% at all. That makes VA the most generous of the four.
Real estate commissions the seller customarily pays stay outside the FHA 6% limit. USDA has excluded real estate commission fees paid by the seller on your behalf from its 6% limit as well.
Two rules apply everywhere. The credit can't exceed your actual closing costs and prepaids, and any money above the cap or above your costs doesn't come back to you. On a Conventional loan, an excess gets subtracted from the price before the lender sets the loan amount.
If you're writing an offer and want to know the exact credit to ask for, call AAA Capital Funding at 888-601-8344. We'll work the real figures with you so the request matches the costs.
Gift funds
On a home you'll live in, gifts can cover the down payment, closing costs and prepaids on all four programs, with a signed gift letter and a paper trail showing the money moving.
- FHA accepts gifts from a family member, your employer or labor union, a close friend with a documented interest in you, a charitable organization, or a government agency with a homebuyer assistance program. The seller, the agents and the builder can't give gifts.
- Conventional accepts gifts from relatives, a domestic partner, a fiancé or fiancée, and a person with a long-standing family-like or mentoring relationship with you. On a single-family home you'll live in, the whole amount can come from a gift. On a 2 to 4 unit home with less than 20% down, you put in 5% of your own money first.
- VA and USDA accept documented gifts toward closing costs and any down payment.
An FHA buyer who brings under $3,000
A buyer is purchasing a $350,000 single-family home in Broward County with FHA 100% financing at 5.75% on a 30-year fixed. Taxes run 0.95% a year, and insurance is $283 a month. The base FHA loan is $337,750 (96.5%), and with the 1.75% upfront mortgage insurance premium financed, the total first mortgage is $343,660.63. The seller agrees to a 3% credit.
| Item | Amount |
|---|---|
| Down payment (3.5%) | $12,250.00 |
| Lender, appraisal, title, settlement and recording fees (estimate) | $5,800.00 |
| Florida doc stamps on the note ($0.35 per $100) | $1,202.95 |
| Florida intangible tax (0.2%) | $687.32 |
| First year of homeowners insurance ($283 × 12) | $3,396.00 |
| Opening escrow deposit (3 months of taxes, 2 of insurance) | $1,397.25 |
| Prepaid interest (15 days) | $812.07 |
| Total before help | $25,545.59 |
| Down payment assistance second | minus $12,250.00 |
| Seller credit (3% of $350,000) | minus $10,500.00 |
| Cash to close | $2,795.59 |
The earnest money deposit you put down with the contract counts toward that $2,795.59, so a $1,000 deposit leaves $1,795.59 to bring on closing day. A gift from a parent can cover all of it.
Raise the seller credit to 4% and it reaches $14,000, which is more than the $13,295.59 in closing costs and prepaids. The credit stops at your actual costs, so the extra $704.41 doesn't come back. Ask for the dollar figure your costs require. FHA's 6% cap leaves room up to $21,000 at this price when you need it.
The monthly payment on this home comes to about $2,720 with taxes, insurance and mortgage insurance. Price Check shows the income that payment needs.
VA and USDA routes to a small check
VA. There's no down payment, and the seller can pay your normal closing costs without touching the 4% concession limit. The concessions on top can cover the funding fee, prepaid taxes and insurance. On a $350,000 home, first-use VA buyers putting less than 5% down pay a 2.15% funding fee, or $7,525, and VA lets you finance it into the loan instead of paying it in cash. A veteran receiving VA disability compensation doesn't pay the funding fee at all.
USDA. There's no down payment, sellers can contribute up to 6%, and the loan amount itself can include closing costs. USDA caps the loan at the lower of the appraised value plus the upfront guarantee fee, or the price plus eligible closing costs. When a $300,000 home appraises at $310,000, up to $10,000 of closing costs can go into the loan.
Reserves on 2 to 4 unit homes
Reserves are money you still have in the bank after closing, counted in months of the full house payment. They don't get spent at the table, but the lender has to see them, so they belong in your cash plan. FHA requires 3 months of reserves on a 3 or 4 unit home. QualRate models 6 months on Conventional and VA 2 to 4 unit purchases, and none on a single-family or 2-unit FHA purchase. On a fourplex with a $4,000 monthly payment, 3 months comes to $12,000 sitting in your account on closing day. The house hacking calculator adds reserves to the cash figure automatically.
Cash you spend before closing
A few costs get paid along the way and show on your closing statement as paid outside of closing. The earnest money deposit goes to the title company or attorney when your offer is accepted, and it's credited back at closing. The appraisal is often paid when it's ordered. You pay the home inspector directly. All three leave your account before closing day, so count them when you add up your savings.
AAA Capital Funding will build your own cash-to-close figure on the exact price you're looking at. Call 888-601-8344 and we'll go through it with you before you commit to anything.