Home Buying
Cash needed at closing
The buyer must produce the deposit and the closing costs at the same moment, so the two add. This is the figure a savings target should be built around.
The Formula
cash needed = down payment + closing costs
The buyer must produce the deposit and the closing costs at the same moment, so the two add. This is the figure a savings target should be built around.
| Symbol | Meaning | Unit | Notes |
|---|---|---|---|
| D | Down payment | currency | The cash paid upfront. |
| C | Closing costs | currency | The total charged at closing. |
| K | Cash needed | currency | The total cheque required at closing. |
What Each Symbol Means
Dcurrency
Down payment
The cash paid upfront.
Ccurrency
Closing costs
The total charged at closing.
Kcurrency
Cash needed
The total cheque required at closing.
See It Worked With Real Numbers
A formula on its own does not tell you which number goes where. The how to calculate closing costs page applies this equation to a concrete case, shows every intermediate step, and names the mistakes that produce a wrong answer even when the algebra is right.
Where This Formula Appears
This equation is the working core of How To Calculate Closing Costs, filed under Finance. Every number the guide produces comes from substituting into this one line.