Mortgage Terms for Understanding: Earnest Deposit
Apr 7, 2021, 11:39 AM
The more you know about the home buying process, the more confident you will be in making the important decisions that will shape your home ownership experience. The information provided will help you make the best decision in your home purchasing decisions.
What is an Earnest Deposit?
Earnest money is a deposit made to a seller that represents a buyer’s good faith to buy a home. The money gives the buyer extra time to get financing and conduct the title search, property appraisal, and inspections before closing. In most cases, earnest money is delivered when the sales contract or purchase agreement is signed, but it can also be attached to the offer. Once deposited, the funds are typically held in an escrow account until closing, at which time the deposit is applied to the buyer's down payment and closing costs. Read more about the basic terms of a mortgage transaction.
Whether you are thinking of buying a home soon, refinancing your existing home, or even if you aren’t sure whether homeownership is in your future at all, you can benefit from an understanding of the process and financial commitment it entails. Use Metro’s FREE Save and Succeed resources, including this 18 minute course about many steps it takes to buy a home, including how to make an initial assessment of your homebuying readiness, the loan qualification and application process, and mortgage management throughout the life of your loan. You can also calculate your mortgage finance questions with our calculators. Let the mortgage team at Metro Credit Union mortgage help you further fulfill your home ownership dreams.