Earnest Money Deposit vs. Down Payment - GoPrime ...
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While an earnest money deposit functions as a promise to the seller, a down payment is a promise to the lender facilitating your mortgage loan. What is a down ... Home»Blog»EarnestMoneyDepositvs.DownPayment EarnestMoneyDepositvs.DownPayment Navigatingthehomebuying processcanbetricky,whetheryou’researchingforyourdreamhomeor preparingyourhometobesold. Twostandardtermsofequal importancetoboththebuyerandsellerare“earnestmoneydeposit”and“down payment.”Bothhavetodowithmoney,butwhatisthedifferencebetween them? EarnestMoneyDepositvs.DownPayment Whatisanearnestmoneydeposit? Anearnestmoneydepositisagood-faithgestureonbehalfof thebuyerprovingtheircommitmenttopurchasingtheseller’sproperty. Howmuchisrequiredforatypical earnestmoneydeposit? Mostoften,theamountofan earnestmoneydepositis1%-5%ofthepurchaseprice;however,thisamountmayvarybasedon thestateyoulivein,thecurrentrealestatemarket,aswellasthebuyer’smethod offinancing. Earnestmoneydepositsare typicallyduewhenthepurchasecontractisfirstexecuted,oftenintheform ofapersonalcheck.Themoneyisheldbyeitherthebuyer’sagent,title company,etc.andisnevergiventothesellerdirectly.Ifthecheckis deposited,thenthefundswillbeheldinwhatisknownasanescrowdeposit accountandwillbecreditedtowardsthepurchasepriceofthepropertyat closing. Dependingonthewordingof thepurchasecontract,asellermaybeentitledtokeepabuyer’searnestmoney deposit,shouldthebuyerfailtocloseonthepropertyduetoanumberof reasons–simplydecidingnottopurchasetheproperty,waiverofcontingencies orfailuretosecurefinancingwithinthetimeframeagreeduponinthepurchase contract. Whileanearnestmoney depositfunctionsasapromisetotheseller,adownpaymentisapromiseto thelenderfacilitatingyourmortgageloan. Whatisadownpayment? Adownpaymentreferstotheamountofmoneyabuyer paystotheselleratclosing,viaacashier’scheckorwireddirectlyfromthe buyer’sbank.Mostoften,themoneyforadownpaymentisderivedfromeither thebuyer’ssavings,proceedsfromthesaleofacurrenthome,oragiftfroma familymember. Howmuchisrequiredforatypicaldown payment? Thelenderoftendetermines theexactamountneededforadownpaymentinrelationtotheoverallloan amount;however,a20%downpaymentisrecommendedbyrealestate agents. AccordingtoexpertsatNerdWallet,“Alargerdownpaymentoffersadvantagesbeyondlowering themonthlymortgagepaymentandavoidingPMI. You’llalsogetalowermortgageinterestrate,payfewerfeesandgainequity inyourhomefaster”(NerdWallet.com). Keepinmindthatinaddition tosavingforadownpayment,youwillneedtobudgetforclosingcostsand otherexpenseswhenpurchasingahome. It’simportanttoconnect withalocallenderthatunderstandstherealestatemarketinyourcommunity, aswellasyourpersonalfinancialgoals.AtGoPrimeMortgage,Inc.,ourlocal lenderswillguideyoueverythrougheverystepofthehomebuyingprocess. Afterall,it’smorethanjustamortgage–We’reconnectingfamilieswith theirdreamhomes!Findalocallendernearyouhere: http://ow.ly/V2MV50xZs6w. SearchtheBlog Searchfor: RecentPosts KevinGuilbertAwardedQ32021GoPrimePersonality! November2,2021 GoPrimeNamedtoTriangleBusinessJournalFast502021 October29,2021 WelcometoGoPrime!MeetourSeptember2021newhires! October14,2021 WelcometoGoPrime!MeetourAugust2021newhires! September8,2021 WelcometoGoPrime!MeetourJuly2021newhires! August30,2021 ThePathtoHomeownershipStartswithGoPrimeMortgage,Inc.! ApplyNow Portal Home Locations LoanOfficers WorkwithUs LoanTypes VAHomeLoans USDALoans FHALoans ConventionalLoans RefinanceYourMortgage AboutGoPrime WhyGoPrime OurBlog CommunitySupport ApplyNow MakeaPayment PortalLogin
延伸文章資訊
- 1The Difference Between Your Deposit and Down Payment
When you find a house and make an offer on it, you'll make a deposit on it. Like the landlord, yo...
- 2Earnest Money Deposit vs. Down Payment - GoPrime ...
While an earnest money deposit functions as a promise to the seller, a down payment is a promise ...
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- 4What is the Difference between Deposit and Down Payment?
That amount it all depends on the purchase price and how quickly you will be closing on the sale....
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To be clear, the deposit is the money you pay up front to secure, or commit to, an agreement of p...
