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Earnest money can cover your closing costs and contribute to the FHA down payment requirement of 3.5 percent. The earnest money may not be used to pay a tax service fee, which is a mortgage lender cost that cannot be passed on to a borrower, or any fees which the lender finds unreasonable or non-customary for the market.
A Letter Of Explanation How to Write a Letter of Explanation. Address the letter to your mortgage loan officer or the mortgage company according to your loan officer’s instructions. Limit your explanation to facts and dates. Avoid any temptation to place blame or rant about anything or anyone involved in the situation you’re addressing.
Earnest money is a good faith deposit that is part of the down payment but should not to be confused with a down payment. When buyers execute a purchase contract, the contract specifies how much money the buyer is initially putting up to secure the contract, to show "good faith," and how much money all together will be deposited as a down payment.
– The earnest money is credited to you at the closing and you can certainly use it as part of the down payment. If you make an offer on a property for $100,000 with a 90% loan and $1,000 earnest money.
Your earnest money can count toward your closing costs, or you can opt to apply it to the down payment of the home. Application of Earnest Money Although an earnest money deposit can go towards the closing costs of a home, it can also be credited towards a number of fees associated with home buying, such as the down payment or escrow fees.
If it does, the earnest money you paid gets released from escrow and is used to help pay your closing costs. If you prefer, the money can instead go toward your down payment or you may have it refunded to you and pay your other costs out of pocket.
In the case of multiple offers, we may see buyers offer a larger down payment/deposit to make the. that the buyer fully intends to go through with the purchase. So, the major role that the earnest.
Earnest Money Deposit vs. Down Payment – Nestiny.com – Once the purchase offer is accepted, the earnest money deposit goes into escrow. Usually it is held by the title company, but it can also go be held by the real estate brokerage. Once the home sale is finalized, the earnest money deposit is applied toward the down payment.
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