Cash to close is the amount of money your are going to need in order to close on the
purchase of your new home. It is the down payment plus all the Settlement Charges.
This page explains how it works with the amount of money that you are going to need to
bring to closing, from a Buyer’s point of view.
In order to close on the purchase, the total to close will be the down payment, PLUS the
settlement charges. The charges mentioned below are rule of thumbs / estimates only
and not accurate numbers. Irrespective of who does your loan, the numbers below are
very close to what they will be at closing, and your lender is the only one that will give
you exact numbers.
Cash buyers: You will need the purchase price PLUS the settlement charges. They
normally are about 1.5% of the purchase price.
VA Buyers: If you are obtaining a VA mortgage, you will need six percent (6%) of the
purchase price for settlement charges as the total amount of money you will need to
close on the transaction (0% down payment PLUS 6% in settlement charges) Using the
CCAP program from Bluecastle Lending, you could buy with as little as 1% of the gross
selling price. Visit www.http://bluecastlelending.com/VAloan.html for more details.
Minimum credit score is 580
FHA Buyers: If you are getting an FHA loan, you will need nine and a half percent
(9.5%) of the purchase price for the total amount of money you will need to close on the
transaction(3.5% down payment PLUS 6% in settlement charges) Using the CCAP
program from Bluecastle Lending, you could buy with as little as 4% of the gross selling
price. Visit www.http://bluecastlelending.com/FHAloan.html for more details. Minimum
credit score is 580
Conventional Buyers: If you are getting a conventional loan, you will need as little as
3% down for a Fannie Mae special program (restricts the income to $45,000.00 / year)
or otherwise 5% plus the settlement charges. Settlement charges with Bluecastle
Lending are about 3.75%. Other lenders are usually about 4.5%. Minimum credit score
is 620. Visit www.http://bluecastlelending.com/Conventionalloan.html for more details.
What are the Settlement Charges?
These charges are all the fees associated with purchasing real estate including but not
limited to: origination charges, processing fees, underwriting fees, tax certification fees,
flood certification fees, pre-paid interest, pre-paid homeowner’s insurance, pre-paid
flood insurance, escrows for real estate taxes, escrows for property insurance, title
company closing fee, lender’s title insurace, owner’s title insurance, endorsements,
fees to record the mortgage, county tax to record the mortgage, state tax to record the
mortgage, survey, appraisal and transaction fees.
Example: On a $300,000.00 purchase, an FHA borrower not using the CCAP program
from Bluecastle Lending will need approximately $28,500.00 total to purchase the
house. This is calculated by adding 3.5% down payment PLUS 6.0% in settlement
charges. Using the CCAP program from Bluecastle, the same scenario could be as little
as 3.5% of the gross selling price; $10.500.00. See our blog page for real life examples.