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Mortgage Tip of the Day

The down payment isn’t the only cash you need.

Buying a $1 million home? Here’s where the extra money goes.

Most buyers plan for their down payment. But there are a few other expenses you’ll need to cover before getting the keys.

The example

Home price
$1,000,000
Down payment (20%)
$200,000
Your mortgage
$800,000
  • Los Angeles, California
  • Owner-occupied home
  • 30-year fixed mortgage
  • Illustrative interest rate: 7.00% (an example, not today’s rate)
  • No discount points
  • Closing date: October 30, 2026
  • Property tax estimate: 1.25% annually
  • Homeowners insurance estimate: $3,500 annually
  • Escrow/impound account included

Here are the costs nobody talks about.

  1. $2,000

    Lender Fees

    What the mortgage company charges to process and approve your loan.

  2. $4,500

    Title & Escrow

    The companies that handle the paperwork, check ownership, and make sure the money gets where it needs to go.

  3. $3,500

    Homeowners Insurance

    Your first year of insurance, generally paid before or at closing.

  4. $4,200

    Initial Escrow Reserves

    Money your lender holds to help pay future property taxes and insurance bills.

    This isn’t an extra fee. It’s money set aside for future bills.

  5. Approximately$767

    Prepaid Interest

    Mortgage interest for the final days of the month after your loan funds.

    Five days of interest, October 26–30, 2026.

So how much cash do you actually need?

Down Payment$200,000
Additional Closing Costs & Prepaids$14,967

Total Estimated Cash to Close

$214,967

That’s about $15,000 beyond your down payment.

Illustrative estimate only. Actual costs depend on the property, lender, insurance, tax requirements, closing date, and transaction-specific adjustments. This example excludes any additional tax prorations, transfer taxes, recording charges, credits, or other fees not listed above.

What about YOUR home?

Every purchase is different. Run your own numbers and see what your monthly payment, closing costs, and total cash needed could look like.

CALCULATE MY CLOSING COSTS

Questions about your numbers?

Text me the price range and down payment you’re thinking about.

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Derek Vail · NMLS #1233953 · 323-823-7913 · derek@livelendla.com

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