Earnest Money, Down Payment and Closing Costs

Earnest Money

Earnest money is a deposit that represents a buyer’s good faith to buy a home.earnest-money-deposit The money gives the buyer extra time to get financing and conduct the title search, property appraisal, and inspections before closing.

Down Payment

The down payment represents a percentage of the full purchase price.   The purchaser makes financing arrangements to cover the remaining amount owed to the seller.  The lender will tell you how much of a down payment is required depending on the loan type.

Closing Costs

Closing costs are the fees you pay when obtaining your loan. Closing costs are typically about 3% of your loan amount and are usually paid at closing.