When people talk about the cost of buying a home, they talk about the down payment. That’s the number everyone knows: 3.5% on FHA, $24,500 on a $700,000 house. But the down payment is not the total cash you need. Closing costs run 2–5% of the price — on top of the down payment. That’s another $14,000 to $35,000 on a $700,000 house. And then there are the costs nobody puts on a checklist.
Here is the full picture, line by line, in California.
The line-by-line breakdown (California, $700,000 house)
| Cost | What it is | Typical range |
|---|---|---|
| Lender fees (origination + underwriting) | What the lender charges to process and underwrite your loan | 0.5–1% of loan ($3,437–$6,873 on a $687,321 loan) |
| Appraisal | A licensed appraiser values the home — the lender orders it through a third party | $500–$900 |
| Home inspection | A licensed inspector goes through the house — roof, HVAC, water heater, water damage | $400–$700 |
| Title + escrow fees | Title search, title insurance, and escrow’s fee for managing the money and documents | $1,500–$3,000 |
| Recording + government fees | The county’s fee to record the deed and the mortgage | $100–$500 |
| Prepaid insurance + tax escrow | Your first year of homeowners insurance plus a few months of property tax held in escrow | $2,000–$5,000 |
That is the core list. Your Loan Estimate will show the exact numbers for your loan — and your closing disclosure, which you get three days before closing, will show the final ones. Sign it fast. Once you sign, the 3-day clock is running.
Your agent’s commission — usually not your check to write
Your buyer’s agent is typically paid by the seller, not by you — usually as a percentage of the sale price, split between the listing agent and the buyer’s agent. That is why there is no reason not to bring your own agent. I go deep on that in New Construction Homes: Do I Need an Agent? and Choosing a Real Estate Agent.
The earnest money — your first cash out
Earnest money is your first cash out, and it comes before everything else. It is 1–3% of the price — $7,000 to $21,000 on a $700,000 house — wired into escrow within 24 hours of your offer being accepted. Before you send a cent, call escrow to verify the wire instructions — wire fraud targets first-time buyers who are moving fast and trusting every email they get. One phone call. Do it every time.
Earnest money goes toward your down payment and closing costs — it is not extra money on top. If the deal falls apart the right way, you get it back. If it falls apart the wrong way, you might not. That is why contingencies matter — a contingency is a clause in your contract that lets you walk away and keep your deposit if a specific check fails: the inspection, the appraisal, or the loan itself — and why your agent walks you through the timing of removing them.
The costs nobody warns you about
The appraisal gap. Say you offer $700,000 and it appraises at $690,000. That $10,000 gap is real money. You renegotiate, you pay the difference out of pocket, or you walk. The bank won’t lend on a house that isn’t worth it.
The inspection surprise. Your inspector finds something big — a bad roof, foundation problems, major plumbing. You ask the seller to fix it, you ask for a credit, or you walk. Know your deal breakers before you get the report.
The pool inspection. If the house has a pool, a separate pool inspection is common — and it is an additional cost on top of the home inspection.
The termite inspection. In California, a termite inspection is standard — and it is an additional cost on top of the home inspection.
The home warranty. A home warranty costs roughly $700 for a year of coverage on major systems and appliances. It is usually paid by the seller or the buyer as part of the negotiation — ask who is paying for it before you assume.
The prepaids. Your lender will collect a few months of property tax and insurance up front, held in escrow. That is not a fee — it is your own money, held for you — but it is cash you need at closing.
The moving costs. Local moves are typically $480–$800 for a small move and $1,000–$2,500 for a larger home. Long-distance moves run $2,000–$5,000 or more. Budget for it — it is not on the closing disclosure, but it is real money.
Don’t buy anything big while you’re in escrow
Do not buy a car, do not open a new credit card, do not finance furniture — not until you have the keys. A new debt changes your debt-to-income ratio, and your lender re-checks your credit before closing. A $600 car payment shrinks the house you can buy more than a quarter-point of rate does. Wait until after you close.
What can cover the closing costs?
Two things can cover closing costs: down payment assistance, and seller credits.
Down payment assistance. CalHFA ZIP covers 2% or 3% of the loan for closing costs — deferred at 0% interest. GSFA Platinum gives up to 5% of the loan with no first-time-buyer requirement. The Empowered 3.5% program gives you 2% or 3.5% toward down payment or closing costs as a grant forgiven after six months. I cover all of them in Down Payment Assistance in California: Every Program Worth Knowing in 2026. One honest warning: CalHFA Dream For All is closed — its 2026 window ran February 24–March 16, 2026.
Seller credits. A seller credit is money the seller agrees to pay toward your closing costs. The limits depend on your loan: FHA allows up to 6% of the price in seller concessions, conventional allows 3–9% depending on your down payment, and VA allows up to 4%. I go deep on this in Seller Concessions: How to Get the Seller to Pay Your Closing Costs (2026).
The full cash picture on a $700,000 house
| Cash you need | Amount |
|---|---|
| Down payment (FHA 3.5%) | $24,500 |
| Closing costs (2–5%) | $14,000–$35,000 |
| Total cash to close | $38,500–$59,500 |
That is the number to save toward — not just the down payment. And keep a cushion after you close. A house comes with surprise bills, and a water heater doesn’t care that you just closed.
My Take
The down payment gets you in the door. The closing costs decide whether you actually close. Budget for both.
What to do with this
- Run the payment on your price in the Mortgage Payment Calculator — full payment, tax and insurance included.
- Read Down Payment Assistance in California: Every Program Worth Knowing in 2026 and Seller Concessions: How to Get the Seller to Pay Your Closing Costs (2026) to see what can cover the closing costs.
- Then start your pre-approval and I’ll tell you exactly how much cash you need to close.
Hear me walk through the hidden costs on the podcast in Episode 16: listen here.
Closing cost figures are planning ranges for California, verified November 8, 2026. Appraisal $500–$900 and inspection $400–$700 per the FTHB Pros tools spec; lender fees 0.5–1% of loan; title and escrow $1,500–$3,000; recording $100–$500; prepaids $2,000–$5,000. Seller concession limits: FHA 6% (HUD Handbook 4000.1), conventional 3–9% (Fannie Mae B3-4.1-02), VA 4% (VA Pamphlet 26-7). This is education, not a rate quote or a loan approval. Dat Nguyen, Certified Mortgage Advisor, NMLS 1379110.