What is an Earnest Money Deposit (EMD) ? |San Diego Home Loans- Laura Borja

what is in earnest money deposit and is it always required? I am Laura Borja and I'm going to answer those questions and more in this week's The Mortgage Minute What is an earnest money deposit? An earnest money deposit is a good faith deposit that a buyer provides when a purchase contract is accepted In California in order for the contract to be valid between the seller and the buyer, a deposit is required Who holds the deposit? The earnest money deposit is held by the escrow company who is a neutral third party that handles the exchange of funds between buyer and seller how much deposit is required? the amount of the earnest money deposit that you will need to provide will depend on your negotiations with the seller typically speaking you should expect between 1 and 2 percent as the required amount what happens to the deposited funds? your earnest money deposit is applied by the escrow company towards your down payment and/or closing costs in the event that you're doing 100% financing and the seller or lender are covering your closing costs all unused funds will be returned to you after the close of escrow I hope that answers your questions about earnest money deposit if you have any questions about this or any other mortgage related topic by all means reach out to me send me an email, give me a call, shoot me a text or connect with me on social media

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