Mortgage planning is not just as simple as budgeting for a down payment.

You will need to plan for three categories of cash-to-close when buying a home.

1. Down payment. You may be able to put as little as zero dollars down.  More likely you can put as little as 1 percent down on a conventional loan and as little as 3.5 percent on an FHA loan. If you want to avoid the extra monthly cost of mortgage insurance, you will need to have a down payment of at least 20 percent.

2. One-time closing costs. These include lender; appraisal fees, title insurance paid in advance for one year; transaction settlement fees, home inspection fees to make sure the property you’re buying is acceptable to you.  These figurew will be presented to you on your Loan Estimate.

3. Pre-paid costs due at closing. When you close on a home, it may be the middle of a month or a local property tax cycle. So the interest you’ll pay on your mortgage for the remainder of the closing month gets split between the buyer and seller when you close. Same with property taxes. Also lenders require you to prepay one year of homeowner’s insurance at closing. And if you’re getting a loan that requires you to save up for property taxes and insurance by paying into an account monthly, you’ll have to prepay that as well — it’s called an escrow or impound account. Generally 3 months of payments.