Demystifying Earnest Money in Real Estate

When buying a house, the term 'earnest money' often comes up, and it can sound more complicated than it is. In simple terms, earnest money is a deposit made to show the seller that you’re serious about purchasing the home. This image illustrates the difference between mortgage jargon and plain language, breaking it down for first-time homebuyers and anyone unfamiliar with real estate transactions.

On the left side of the image, it describes earnest money in 'mortgage speak' as a 'good-faith deposit submitted with your contract.' To clarify, in plain English, it equates to "I'm serious about buying this house." It's important to note that this deposit isn't an extra fee your lender keeps, but rather a part of your financial commitment showing your intent to follow through with the purchase.

Chad Bratton, Senior Loan Officer at NEXA Lending. NMLS #1483394. Call (405) 590-4252.

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