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Earnest Money: How Much to Put Down and How It Works

Quick answer

Earnest money is a good-faith deposit you make when a seller accepts your offer, typically 1% to 3% of the purchase price. It's held in escrow by a title company, attorney or broker and applied to your down payment or closing costs at closing. You can usually get it back if you cancel under a contract contingency.

By Purchase Mortgage Loan Editorial Team Checked against official sources per our editorial standardsLast updated

Can I lose my earnest money?

You can lose it if you back out for a reason not covered by your contract or miss deadlines. Common protections include inspection, appraisal, financing and home-sale contingencies.

Earnest money vs down payment

Earnest money is paid upfront to secure the deal; the down payment is paid at closing. Your earnest money counts toward the down payment or closing costs.

Frequently asked questions

Often yes, but lenders will want documentation of the gift and transfer.

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Figures on this page are estimates for educational purposes only and are not a loan offer or commitment to lend. Rates, loan limits, fees and assistance programs change frequently and vary by lender, location and borrower profile. Confirm current terms with a licensed loan officer.