Buying a Home
Understanding Earnest Money
Published 2026-07-31 · Last reviewed 2026-07-31 · Reviewed by Jim Lyddon, NMLS #2573609
Earnest money is a good-faith deposit submitted with your purchase contract and held in escrow. In most Arizona transactions it is credited toward your down payment and closing costs at settlement rather than being an additional cost, but the contract governs when it is refundable.
What to know
- Held in escrow, not paid to the seller directly.
- Typically credited to you at closing.
- Refundability depends on the contract's contingency periods.
- The source of the funds must be documented for underwriting.
How Jim approaches this
Bring your specific numbers. General education gets you oriented, but the decision only becomes clear when it is run against your income, your cash position, the property you are considering and how long you plan to keep the loan. That conversation is free and does not require an application.
The information on this website is provided for general education only and does not constitute financial, tax or legal advice. Loan programs, guidelines and availability are subject to change and to borrower and property qualification.
JHL Mortgage, Inc. is an Equal Housing Opportunity lender. We do business in accordance with the Federal Fair Housing Law and the Equal Credit Opportunity Act.