Short answer: Maryland buyers need more than a down payment. A complete cash plan includes earnest-money deposit timing, down payment, lender and settlement charges, inspections, appraisal when charged separately, prepaid taxes and insurance, moving expenses, immediate repairs, and reserves after closing.
The exact amount depends on the loan, purchase price, property, county, contract terms, and timing. Build the plan by category instead of relying on one percentage.
Earnest money is normally credited within the transaction rather than added on top of the agreed cash to close, but it is due earlier. That timing matters when your funds are spread among accounts or depend on a sale.
The seven cash buckets
- Earnest money: delivered according to the contract and credited at settlement.
- Down payment: the portion of price not financed.
- Loan costs: lender fees, points if selected, and other financing charges.
- Settlement and title costs: services needed to transfer and protect ownership.
- Prepaids and escrow funding: items such as homeowners insurance, taxes, and interest collected for timing.
- Due-diligence costs: inspections and specialized evaluations chosen for the property.
- Post-closing funds: moving, repairs, furnishings, and emergency reserves.
Down payment is not the same as cash to close
Loan programs have different minimums and qualification rules. The right down payment balances payment, mortgage insurance, rate, offer strategy, and reserves. Ask a licensed lender to compare scenarios instead of assuming the largest down payment is automatically best.
The lender’s Loan Estimate and later Closing Disclosure separate the amount financed from estimated cash to close. Review both carefully and ask questions early.
Closing costs and prepaids
The CFPB notes that buyer closing costs commonly depend on price, down payment, loan type, and location. Maryland settlement figures may include lender charges, appraisal, title and settlement services, recording-related charges, transfer-related charges allocated by the contract, insurance, taxes, and escrow funding.
Use our Maryland affordability guide for a detailed checklist and the CFPB Loan Estimate explainer for official document guidance.
Inspection and property-condition funds
A general inspection may lead you to consider specialized evaluations based on the home: radon, chimney, sewer, well, septic, structural, environmental, or other systems. Services and recommendations vary by property. Decide what information you need before shortening or waiving protections.
Keep a separate first-year repair reserve. Inspection findings help prioritize; they do not eliminate every ownership surprise.
How to build your number
- Ask the lender for written estimates at realistic prices.
- Ask the title professional for a preliminary settlement estimate when appropriate.
- List inspections you may choose.
- Add moving and immediate-home costs.
- Protect the reserve amount you do not want to spend.
- Recalculate before every serious offer.
Maryland planning examples without false precision
A buyer using a low-down-payment loan may keep more savings but have a higher payment or mortgage insurance. A buyer making a larger down payment may reduce financing costs but have less liquidity. A condo buyer must include the association fee; a rural buyer may reserve more for well or septic needs. The best plan is the one that works for the actual buyer and property.
Common mistakes to avoid
- Saving only for the down payment.
- Forgetting that earnest money is due before closing.
- Counting seller assistance before it is negotiated and allowed by the loan.
- Ignoring inspections, moving, and immediate repairs.
- Draining reserves to reach a round-number down payment.
- Wiring funds from instructions that were not independently verified with the title company.
Frequently asked questions
Can the seller pay some buyer costs?
Sometimes, subject to negotiation, market conditions, appraisal, and loan-program limits. Treat it as a term to evaluate—not guaranteed money.
Can gift funds be used?
Many programs allow eligible gift funds with documentation, but rules differ. Discuss the source and paper trail with the lender before money moves.
How soon should I prepare the cash?
Before shopping seriously. Early planning gives time to document accounts, resolve transfer timing, and avoid rushed decisions.
Build a complete Maryland cash plan
Use the calculators, review the buyer guide, or talk with Kat Nat Team before you set a search range.