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Mortgage Glossary

Earnest Money Deposit

Mike Starr·Reviewed August 2026

An earnest money deposit is the specific funds submitted by a buyer to demonstrate commitment when making an offer on a property. Held in an escrow or trust account, it signals to the seller that the buyer is serious. The amount — typically 1–3% of the purchase price — is credited toward the buyer's costs at closing or returned if a valid contingency is triggered.