Earnest Money

Earnest Money

buy a home. The deposit is held by a seller or third party like a real estate agent or title company. If the home sale is finalized or “closed” the earnest money may be applied to closing costs or the down payment. If the contract is terminated for a permissible reason, the earnest money is returned to the buyer. If the buyer does not perform in good faith, the earnest money may be forfeited and paid out to the seller. Learn more about the homebuying process (cfpb.gov/owning-a-home/). Equity Equity is the amount your property is currently worth minus the amount of any existing mortgage on your property. Learn what a home equity loan is (cfpb.gov/askcfpb/106).