However, if you don't get your home funding, you can potentially lose your deposit. How To Ensure Your Earnest Money Is RefundableĪt closing, your earnest money will be applied as a credit toward your closing costs. Here are some of the most common ways potential homebuyers get a refund of their earnest money. It's only under specific circumstances that an earnest money deposit is refundable. You always want to give it to a third party, such as the title company, to put it in an escrow account for you. Your real estate professional will let you know what to expect as it varies depending on the area. The amount you give can be a fixed amount or a percentage of the selling price. Any sum that you deposit as earnest money will go towards your closing costs. It also gives you time to secure your financing if you haven't done so already. What Is An Earnest Money Deposit?Įarnest money is a kind of security deposit given to the seller after they accept the purchasing agreement, and it provides a sort of "proof" that you're serious about buying the home. We're the lending professionals! Contact us for helpful and straightforward answers to all your mortgage questions. We'll share what those terms mean and the conditions under which they may be refundable. Today, we want to focus on costs called "earnest money deposit" and "good faith deposit." Some of those include fees for the appraisal, home inspection, and title work. There are other costs associated with buying a home beside the down payment. Earnest Money Deposit Versus Good Faith Deposit: What's The Difference?
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