Earnest Money, Down Payment & Cash-to-Close: Understanding the Differences

Earnest Money, Down Payment & Cash-to-Close: Understanding the Differences

A homebuyer should understand what an earnest money deposit means, what a down payment is, and the amount and purpose of the cash required at closing—before you find yourself the perfect home.

Earnest Money

Earnest money is the deposit check you write when you commit to purchasing a particular home, and your down payment and cash-to-close encompass the money you must have when you come to the closing table.  In every case, the new home buyer should be aware of how much cash will be needed to navigate through the "rules" of down payment, cash-to-close, and earnest money. The amount of your down payment is dictated by your loan program, your available savings or your desired monthly payment. Your closing costs include all the fees you pay to get your mortgage. Some of these costs can be negated to be paid by the seller. 

Buying a home can require a lot of planning, legwork, and saving. Being knowledgeable and prepared with the cash reserves you'll need is a great way to keep the home buying process moving forward.

Buying your home will be a more positive adventure when you are well-informed of the differences in earnest money, down payment and cash-to-close during the mortgage process.

You are welcome to call MidCountry Bank with any questions in regard to your mortgage servicing needs at any time. 

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Minimum and Maximum loan amounts apply. Rates and programs subject to change at any time. Loans subject to borrower qualifications, property evaluation and credit approval. All rates and program guidelines subject to change without notice based on consumer eligibility and marketing conditions. All loans subject to credit approval and compliance with underwriting standards.

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