Down payment, closing costs & escrow - who's who

Three terms get blurred together. Here's who's who:

Down payment is your ownership stake — money that goes straight toward the price of the home. Put down 3.5% on a $250,000 home and you've bought $8,750 of it on day one.

Closing costs are the fees to make the sale happen — appraisal, title, lender origination, recording fees. They don't buy any of the house; they pay the people who process the deal.

Escrow (prepaids) is money set aside for future bills — property taxes and homeowners insurance — collected a little ahead so the lender can pay them on your behalf when they come due.

Down payment builds equity. Closing costs and escrow are the cost of doing the transaction. All three are fair game for assistance to cover.

Next: See how each bucket breaks down for a home in your budget inside KevaAI.