Sergio Davis · Mortgage Loan Officer · NMLS# 2805755
Reviewed September 18, 2026 · General education; guidelines and lender requirements can change.
“How much do I need down?” is only part of planning for a home. You also need to know the costs due before closing, the amount due at closing, and the savings you want left afterward. Those numbers can differ substantially.
For a buyer whose hours vary, I suggest starting with the complete cash picture before stretching for a purchase price. This guide explains the categories and gives you a worksheet to discuss with your loan officer.
Down payment, closing costs, and cash to close
The down payment is your contribution toward the purchase price. Closing costs are separate transaction and financing expenses. Estimated cash to close combines the relevant amounts, then accounts for items such as your deposit, credits, and other adjustments. Check the calculation on your Loan Estimate rather than simply adding a generic percentage to the price. Source: CFPB, Loan Estimate Explainer.
Do not add a prepaid or escrow item twice if it is already included in the closing-cost total. Your lender and escrow team can show where each item appears.
An example of the arithmetic
This is a hypothetical budgeting illustration, not a loan offer, quote, or estimate of Orange County fees. Suppose a worksheet lists a $40,000 down payment, $12,000 of closing costs including its prepaid and escrow items, an $8,000 deposit already paid, and a $2,000 eligible credit. The amount remaining due would be $42,000: $40,000 + $12,000 − $8,000 − $2,000.
You would already have paid the deposit. If you also want $15,000 left after the purchase, that is a separate savings target. Inspection or other expenses paid separately may increase total cash spent even when they do not increase the remaining closing wire. Have your own worksheet reconcile every amount.
Reserve room for life after the keys
The CFPB recommends considering moving costs, initial home expenses, and an emergency cushion before deciding how much savings to put into the purchase. Lender-required reserves and your own emergency fund serve different planning purposes and may not be identical. Source: CFPB, Determine Your Down Payment.
My suggestion for tradespeople is to think through a quiet work period as well as an ordinary month. List the bills that continue if overtime stops: housing, food, utilities, transportation, insurance, and minimum debt payments. Decide what amount you would be comfortable keeping accessible, then discuss how that interacts with the mortgage requirements.
What assistance or a credit actually means
Ask whether help with upfront costs is a grant, a loan, or another arrangement with repayment conditions. For example, CalHFA describes MyHome as a deferred-payment junior loan used with an eligible CalHFA first mortgage. Deferring payments does not make the obligation disappear. Eligibility and current program availability need individual review. Source: CalHFA, MyHome.
If someone mentions a union-member credit, get the written terms before including it in your budget: who provides it, which loans qualify, what costs it can cover, whether it changes pricing, and how it appears in the transaction. This article does not advertise or confirm a particular member discount.
Compare offers using the same assumptions
Compare the same loan amount, term, product, and lock assumptions. Review the total payment, points, lender fees, credits, and cash required together. A lender credit may offset upfront costs in exchange for a higher rate. The lowest cash-to-close figure is not automatically the lowest-cost loan. Source: CFPB, Reviewing Your Loan Estimate.
You may be able to shop for certain closing services. The Loan Estimate identifies the services you can shop for; ask how to compare approved providers instead of assuming every fee is fixed. Source: CFPB, Shopping for Closing Services.
Bring these five numbers to your first conversation
- A monthly housing payment you would feel comfortable carrying.
- The savings you can document.
- The amount you want to retain after closing.
- Known monthly debt payments.
- A tentative purchase timeline and property area.
Later, compare your Closing Disclosure with the most recent Loan Estimate and ask about changes before signing. For covered mortgage transactions, the Closing Disclosure generally arrives at least three business days before closing. Source: CFPB, Review Documents Before Closing.
These examples are educational, not a rate quote, pre-approval, tax advice, or commitment to lend. Loan and property eligibility require an individual review.