{"id":3344,"date":"2024-08-16T11:41:09","date_gmt":"2024-08-16T16:41:09","guid":{"rendered":"https:\/\/tomo.com\/blog\/?p=3344"},"modified":"2025-02-10T14:00:32","modified_gmt":"2025-02-10T19:00:32","slug":"what-is-the-difference-between-earnest-money-and-my-down-payment","status":"publish","type":"post","link":"https:\/\/tomo.com\/blog\/what-is-the-difference-between-earnest-money-and-my-down-payment\/","title":{"rendered":"What is the difference between earnest money and my down payment?"},"content":{"rendered":"\n

Earnest money is just an initial deposit to secure your offer, while the down payment is a larger sum that reduces the amount you need to borrow.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Think of earnest money as a way to show the seller you\u2019re serious about the purchase. This deposit, usually ranging from 1% to 3% of the home\u2019s price, helps make your offer stand out.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Does earnest money go towards the down payment?<\/h3>\n\n\n\n

<\/p>\n\n\n\n

Yes, earnest money does go towards your down payment<\/a>. If your offer is accepted, the earnest money you\u2019ve already paid is applied to your down payment or closing costs. <\/p>\n\n\n\n

<\/p>\n\n\n\n

For instance, if you\u2019ve put down $5,000 in earnest money and your total down payment is $20,000, you\u2019ll only need to pay the remaining $15,000 at closing.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Will I get earnest money back if my offer is not accepted, or if the deal falls through?<\/h3>\n\n\n\n

<\/p>\n\n\n\n

If your offer isn\u2019t accepted, you usually get your earnest money back. This deposit is meant to show the seller you’re serious about buying, but it’s refundable if your offer doesn’t go through.<\/p>\n\n\n\n

<\/p>\n\n\n\n

Just make sure you understand the terms in your purchase agreement. (A purchase agreement is a contract between the buyer and seller that lists all the details about buying a house).  If you back out of the deal for reasons not covered in the contract, you might lose your earnest money. However, if the sale falls through due to issues like financing or a bad inspection, you should be able to get your earnest money back.<\/p>\n\n\n

\"\"<\/div>

Claire Gallaudet<\/a><\/p>

Claire is a Mortgage Analyst at Tomo, where she explores the data and trends shaping the housing market. She is especially interested in how economic forces impact homebuyers. A Seattle native, she now lives in Austin, where she balances analysis and communications with teaching yoga and walks around the lake with her dog.<\/p><\/div><\/div>\n\n\n

If you’re ready to start your journey to homeownership, get pre approved with Tomo Mortgage today.<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Earnest money is just an initial deposit to secure your offer, while the down payment is a larger sum that reduces the amount you need to borrow. Think of earnest money as a way to show the seller you\u2019re serious about the purchase. This deposit, usually ranging from 1% to 3% of the home\u2019s price, […]<\/p>\n","protected":false},"author":31,"featured_media":3778,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"fifu_image_url":"","fifu_image_alt":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[38],"tags":[],"class_list":["post-3344","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-mortgage-dictionary"],"aioseo_notices":[],"jetpack_featured_media_url":"https:\/\/tomo.com\/blog\/wp-content\/uploads\/2024\/08\/what-is-earnest-money-tomo-jpg.webp","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/3344","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/users\/31"}],"replies":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/comments?post=3344"}],"version-history":[{"count":3,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/3344\/revisions"}],"predecessor-version":[{"id":3589,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/posts\/3344\/revisions\/3589"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media\/3778"}],"wp:attachment":[{"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/media?parent=3344"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/categories?post=3344"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/tomo.com\/blog\/wp-json\/wp\/v2\/tags?post=3344"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}