CazaShort answer: The cash you need at closing is usually more than your down payment. The Consumer Financial Protection Bureau (CFPB) describes estimated cash to close as your down payment plus closing costs, minus any deposit you’ve already paid to the seller, minus any seller credits, and plus or minus other adjustments.1 Closing costs are counted separately from the down payment.2 So the right question isn’t “How much is 20% down?” It’s “What’s my cash to close, and what have I already paid?”
The listing price on Zillow is where this starts, not where it ends. If you’re still deciding whether the price itself is reasonable, start with how to tell if a Zillow listing is overpriced. This guide covers the upfront money needed to complete the purchase. It doesn’t cover the ongoing costs of owning the home, which are in our guide on whether the property tax shown on Zillow is accurate.
The cash-to-close formula
Based on the CFPB’s Loan Estimate explainer:1
Cash to close = Down payment + Closing costs − Deposit already paid to the seller − Seller credits ± Other adjustments
Each term counts once:
- Down payment: the part of the purchase price you pay yourself rather than borrow.
- Closing costs: the costs of completing the transaction. Closing costs don’t include the down payment.2 Your lender’s Loan Estimate lists them.
- Deposit already paid to the seller: money you paid earlier, often called an earnest-money deposit. It was already paid, so it’s subtracted here instead of being paid again.1
- Seller credits: an amount the seller has agreed to pay toward your closing costs. It reduces what you bring.1
- Other adjustments: items that can raise or lower the final figure. Your lender’s documents show what applies to you.
The double-counting trap: a deposit you’ve already paid lowers what’s due at closing. It doesn’t lower what the home costs you. Subtract it once in the formula, but remember that it still came out of your savings.
A worked example (hypothetical)
The numbers below are made up to show the math. They aren’t typical, average, or expected costs, and your figures will differ.
| Line | Hypothetical amount |
|---|---|
| Purchase price | $400,000 |
| Down payment (10%, chosen for illustration) | $40,000 |
| Closing costs from a hypothetical Loan Estimate (including the initial escrow deposit) | $12,000 |
| Deposit already paid to the seller | −$8,000 |
| Seller credit toward closing costs | −$3,000 |
| Other adjustments (set to $0 for simplicity) | $0 |
| Estimated cash to close | $41,000 |
The math: $40,000 + $12,000 − $8,000 − $3,000 ± $0 = $41,000.
In this hypothetical, the buyer brings $41,000 to closing. Their total cash used for the purchase is $49,000: the $41,000 due at closing plus the $8,000 deposit paid earlier. Both figures are correct. They answer different questions.
Notice what isn’t added on top. The initial escrow deposit is already inside the closing-cost line, and the seller credit is subtracted only once. If your closing-cost figure already includes an item, don’t add it again.
The initial escrow deposit
The CFPB defines the initial escrow deposit as the amount you pay at closing to start your escrow account, if your lender requires one.3 It’s part of the money you bring to closing, not part of your down payment. Look at your lender’s documents to see whether it applies to you and where it’s listed.
For a rough sense of property tax after you buy, a separate question from cash to close, see the property tax after you buy calculator. Its result is an estimate, not a bill.
Loan Estimate and Closing Disclosure checklist
Your lender gives you a Loan Estimate and a Closing Disclosure. Use them together.
On your Loan Estimate1
On your Closing Disclosure2
If you’re comparing a lower interest rate with a lower purchase price, the rate drop vs. price cut calculator looks at the monthly payment side. It’s a separate question from cash to close.
What this guide can’t tell you
- Your actual figures. Closing costs depend on your loan, lender, and transaction. Only your lender’s documents show your real numbers.
- Location-specific charges and reserve requirements. This guide doesn’t cover them. Ask your lender and closing agent what applies to you.
- Deposit refunds. This guide does not address whether a deposit can be returned, and it does not say that a deposit is refundable.
- Loan approval. Knowing your cash to close doesn’t mean you’ll qualify for a loan.
FAQ
Are closing costs included in the down payment?
No. The CFPB treats closing costs separately from the down payment. On the Closing Disclosure, total closing costs exclude the down payment, and that total differs from Cash to Close.2
Does earnest money reduce my cash to close?
Yes. A deposit you’ve already paid to the seller, often called earnest money, is subtracted when your remaining cash to close is calculated.1 It reduces what’s due at closing, but it doesn’t reduce your total cost. This guide does not say whether that deposit can be returned.
What is an initial escrow payment (initial escrow deposit)?
The CFPB calls it an initial escrow deposit. It’s the amount you pay at closing to start your escrow account, if your lender requires one.3
Can closing costs change before closing?
They can. The CFPB says to check that the Cash to Close on your Closing Disclosure matches your most recent Loan Estimate. If items differ, call your lender immediately and ask why.2
Every figure in this guide is an estimate or a hypothetical illustration. None of it is a lender quote, a loan approval, or an appraisal. Rely on your Loan Estimate and Closing Disclosure for your actual numbers. Caza is not affiliated with or endorsed by the CFPB.
Sources
- Consumer Financial Protection Bureau, “Loan Estimate explainer,” https://www.consumerfinance.gov/owning-a-home/loan-estimate/ (accessed Nov 8, 2026). Back to text
- Consumer Financial Protection Bureau, “Closing Disclosure explainer,” https://www.consumerfinance.gov/owning-a-home/closing-disclosure/ (accessed Nov 8, 2026). Back to text
- Consumer Financial Protection Bureau, “What is an initial escrow deposit?” (last reviewed Aug 8, 2024), https://www.consumerfinance.gov/ask-cfpb/what-is-an-initial-escrow-deposit-en-160/ (accessed Nov 8, 2026). Back to text