Realistically, how much extra cash should I budget for closing costs?

first-time homebuyerreal estatemortgagebudgeting
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Plamen_25
Joined:
17.03.2023
Posts: 504
Topic Starter
23.02.2025 01:01
I'm currently in the process of getting pre-approved for my first home, and while I have a solid down payment saved, I'm getting nervous about the hidden closing costs. Everyone gives me different estimates, ranging from 2% to 5% of the purchase price, which is a pretty huge gap when you're on a tight budget. Does anyone have a breakdown of what these costs actually look like in practice versus what the lender initialy estimates? I'm trying to figure out exactly how much liquid cash I need to keep in my savings account beyond the down payment so I don't get blindsided at the closing table.
10 replies in this topic
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Yana_P
Joined:
14.10.2023
Posts: 832
25.03.2025 04:52
In reply to a previous post
Honestly, aim for 5%. It's better to have that extra money sitting in your savings account and not need it than to be scrambling at the last minute.
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Znaesht
Joined:
02.03.2020
Posts: 59
24.04.2025 21:25
In reply to a previous post
Don't forget to account for prepaid items like property taxes and homeowners insurance. That's usually what catches first-time buyers off guard the most.
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Oli_S
Joined:
16.03.2021
Posts: 1634
16.05.2025 21:11
In reply to a previous post
My lender's initial estimate was about 3%, but by the time we got to the actual closing, it was closer to 4.5% because of title insurance and appraisal adjustments.
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bai_ivan
Joined:
25.09.2022
Posts: 1393
22.06.2025 07:38
It really depends on your location. In some states with high transfer taxes, 5% might not even be enough, so check your specific county regulations.
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ObiknovenChovek
Joined:
27.03.2020
Posts: 2300
26.08.2025 14:47
In reply to a previous post
I'd suggest asking your realtor for a sample 'Net Sheet' for a house in your price range. They usually have a pretty good idea of the local fees.
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otgovor_BG
Joined:
24.10.2023
Posts: 1228
30.10.2025 04:07
In reply to a previous post
I set aside 6% of the purchase price just to be safe. It felt like overkill at the time, but it gave me so much peace of mind during the closing process.
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agata_k
Joined:
21.01.2021
Posts: 1105
19.01.2026 01:07
In reply to a previous post
Are you planning on asking the seller for closing cost assistance? That can make a massive difference if your budget is tight.
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agata_k
Joined:
27.12.2023
Posts: 215
12.02.2026 14:45
In reply to a previous post
The Loan Estimate form you get from your lender is legally required to be fairly accurate, but keep in mind they often underestimate the 'prepaids' portion.
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Krasen_K
Joined:
18.11.2025
Posts: 2405
15.02.2026 03:08
I'm in the same boat, good luck with the pre-approval process!
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Poli_H
Joined:
22.04.2023
Posts: 559
24.02.2026 15:10
In reply to a previous post
Just remember that your down payment and closing costs are two totally different buckets. Don't touch that down payment money!

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