YOUR MORTGAGE, EXPLAINED
Your down payment is only one part of the cash needed to buy
Eric’s October 2026 video explains why the amount you have saved cannot be judged against a down payment alone. The better plan compares total purchase funds, money already paid and the savings left afterward.
By Eric Hamilton · Published October 7, 2026
Originally uploaded October 7, 2026 · 7:35 · Watch on YouTube
Written companion added October 7, 2026. Adapted from Eric’s video captions with source checks; not a word for word transcript. The recording retains its original date.
Separate the three numbers
The down payment reduces the amount borrowed. Closing costs, prepaid items and initial escrow deposits are other parts of the purchase budget. Cash to close is what remains due at settlement after deposits, credits and other adjustments are accounted for. An earnest money deposit is money paid earlier toward the transaction, not an additional fee to count twice. Expenses paid separately, such as an inspection, still reduce the savings available for the move.
Follow the reconciled $300,000 example
The video’s second illustration uses a $300,000 purchase with 3% down, or $9,000, and $7,000 in estimated costs, prepaids and escrow. That totals $16,000. An assumed eligible $6,000 seller credit reduces the buyer’s total contribution to $10,000. With $5,000 already deposited as earnest money, another $5,000 is due at closing. A buyer starting with $20,000 therefore has $10,000 remaining before any separate expenses. These are illustrative figures, not a quote or an eligibility determination.
Keep credits and deposits in separate columns
A seller credit can offset permitted costs, subject to the loan’s limits and actual charges; it is not a substitute for the required down payment. The video’s earlier $400,000 illustration has inconsistent labels for a $5,000 adjustment. If it is an additional deposit, it also reduces the starting savings. Do not use that sequence to budget without clarification. The written estimate and closing statement should reconcile every dollar.
Plan the savings cushion first
Eric’s main recommendation is to decide what you want left in the bank before building the purchase. Ask for an early planning estimate and the formal Loan Estimate when applicable. Compare the final Closing Disclosure with the latest estimate and ask about changes. Do not assume the final number must always be lower. Explain gifts and account transfers to the lender so documentation can be handled correctly.
Protect the money before sending it
Verify wire instructions with a trusted closing representative using a previously confirmed phone number. Do not rely on an email’s appearance or contact details alone. For most covered mortgages, the Closing Disclosure must be received at least three business days before consummation. Use that review period to resolve questions about funds, terms and the closing process.
Is earnest money extra money on top of the down payment?
It is generally credited toward the transaction. Track it as money already paid so you do not count it twice.
What should I know before making an offer?
Know your estimated payment, total funds needed for the purchase and projected savings after all purchase and moving expenses.
Sources and scope
Published October 6, 2026 in America/Chicago (October 7 UTC). Examples are illustrative. Caption review and vidIQ video analysis both identify an inconsistent first deposit example; this adaptation uses the coherent second example and identifies the ambiguity.
- CFPB: Closing Disclosure explainer Accessed October 6, 2026
- CFPB: Loan Estimate explainer Accessed October 6, 2026
- CFPB: Determine your down payment Accessed October 6, 2026
- CFPB: Protect your closing funds Accessed October 6, 2026
General education, not a loan quote, approval or an individual recommendation. Ask the appropriate professional about your situation.
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