Earnest money
A good-faith deposit made when your offer is accepted, demonstrating serious purchase intent. Typically 1–3% of the purchase price. Credited toward your down payment or closing costs at closing. May be forfeited if you back out of the contract outside the contingency window.
How does this affect your loan? Estimate self-employed qualifying income with the
DTI calculator, or read the
self-employed mortgage guide.
Related terms
- Closing disclosure (CD) — The final itemized disclosure of your loan terms, rate, monthly payment, and all closing costs. Federal law re…
- HOA (Homeowners Association) — Monthly fees for shared-property communities (condos, townhomes, planned developments) covering common area ma…
- Primary residence — The home a borrower lives in as their main residence. Lenders apply the most favorable terms to primary reside…
- PITI — Principal, Interest, Taxes, and Insurance — the four components of the full monthly housing payment. Principal…
- Appraisal — An independent assessment of a property’s market value performed by a licensed appraiser hired by the lender.…
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Sources
Educational definition only — not financial, legal, or tax advice. Programs and limits change; verify current terms with a licensed professional.