Total Paid at Closing
Definition and meaning of Total Paid at Closing in real estate.
Total paid at closing is the cumulative amount of cash a homebuyer must pay on the day a real estate transaction is finalized. This amount includes the down payment, lender fees, title services, government taxes, and prepaid expenses like property taxes and homeowners insurance premiums.
In more detail
Also known as cash to close, this sum is disclosed to the buyer on the Closing Disclosure document at least three days before the closing meeting. Lenders require these funds to be paid via wire transfer or cashier check to ensure the money is secure and immediately available.
Buyers must also demonstrate they have sufficient cash reserves remaining in their accounts, which is typically equal to two months of housing expenses, to verify financial stability. Comparing this figure to the initial Loan Estimate helps buyers spot any unexpected increases in fees before signing the final paperwork.
Key facts
| Category | Legal, Titles & Closing |
|---|---|
| Also known as | Cash to close |
| Payment method | Wire transfer or certified cashier's check |
| Key document | Listed on page three of the Closing Disclosure |
A buyer purchasing a home needs $15,000 for the down payment and $5,000 in closing costs, making the total paid at closing $20,000, which they pay using a certified cashier's check.
Frequently asked questions
What is the difference between closing costs and the total paid at closing?
Closing costs are the fees charged by third parties to process and finalize the loan and transfer the property. The total paid at closing includes all of these closing costs plus your down payment, minus any earnest money deposits you already paid.
Can I pay the total paid at closing with a personal check?
No, settlement agents and title companies do not accept personal checks for closing funds because they take time to clear. You must use a wire transfer or a certified cashier's check from your bank.