Question: How much money in closing costs will we need after the closing?

Answer: My first answer to this question was that you don't need to pay closing costs after the closing. You pay them before or at the closing.

While that answer is correct, there is another way to look at it. The woman asking the question may not have had the best vocabulary to get the right answer and that is often the case. She wanted to know how much money she and her husband would need to have in the bank after the closing. She wanted to now how much they would need in reserves. Reserves are not actually closing costs, but they may be a requirement of the loan program you are using. Particularly if you are buying a multi-unit property, your lender does not want to know that you completely bottomed out all of your available funds to make the closing happen. They really want to know that you have enough money to make the mortgage payment, especially that first payment. They want to know you have some money for emergency repairs.

To find out if you will be required to have reserves and how much, ask your loan originator as you are considering different loan programs. Most of them will tell you and disclose that amount to you, but occasionally someone in the workshop tells me they found out they need reserves but did not know initially. Ask. Ask if you will need reserves and how much will you need.