Does a HELOC replace my mortgage?

No — that's the main difference from a cash-out refinance. A HELOC sits behind your existing mortgage as a second lien, so your original loan stays exactly as it is.

Can I borrow again after paying down a HELOC?

Yes, during the draw period — that revolving flexibility is the defining feature. After the draw period ends, the line enters repayment and you pay the balance down.

HELOC or cash-out refinance — which is better?

It depends on your current mortgage, how much you need, and whether the need is ongoing. If you want to keep your mortgage and value flexibility, a HELOC often fits; for a single lump sum, a cash-out refinance may be better.

Earnest Money Deposit Explained

What earnest money is

An earnest money deposit is a sum of money a buyer puts down when making an offer on a home, to show the seller they’re serious and committed. It’s typically held by a neutral third party, such as an escrow or title company, rather than going directly to the seller. If the purchase goes through, the earnest money usually gets applied toward your down payment or closing costs, so it’s not an extra cost, but part of what you’ll pay.

How much is typical

The amount varies by market and price, and is often expressed as a percentage of the purchase price, though local norms differ. A larger earnest money deposit can make an offer look stronger to a seller in a competitive situation. The specific amount is part of your offer strategy, which your real estate agent can advise on based on local conditions.

When it’s refundable

A key question is what happens to your earnest money if the deal doesn’t close. This depends heavily on the contract’s contingencies, conditions that must be met. If you withdraw for a reason protected by a contingency (such as financing, inspection, or appraisal issues, where those contingencies exist), you can typically recover your deposit. If you back out for a reason not protected by the contract, you may risk losing it. Understanding your contingencies is essential.

Protecting your deposit

To protect your earnest money, understand your purchase contract and its contingencies before you sign, and work within any deadlines they set. Keep the funds with the designated neutral party, and be cautious about wiring instructions given the risk of fraud. Your real estate agent and, where applicable, an attorney can help you understand what protects your deposit. A licensed loan originator can explain how earnest money fits into your overall cash to close.

This article is for general educational purposes and is not financial, legal, or tax advice, nor a commitment to lend or an offer of any specific rate or term. Consult a licensed professional about your situation. MortgageQuote.com · NMLS #1967971. Equal Housing Opportunity.

Frequently asked questions

What is an earnest money deposit?

Money a buyer puts down when making an offer to show they’re serious. It’s typically held by a neutral third party and usually applied toward your down payment or closing costs at closing.

How much earnest money is typical?

It varies by market and price, often expressed as a percentage of the purchase price, with local norms differing. A larger deposit can strengthen an offer in competitive situations.

Is earnest money refundable?

It depends on your contract’s contingencies. Withdrawing for a protected reason (like financing or inspection issues, where those contingencies exist) typically lets you recover it; backing out otherwise may risk it.

How do I protect my earnest money?

Understand your contract’s contingencies and deadlines before signing, keep funds with the designated neutral party, and verify any wiring instructions carefully. Your agent and attorney can help.

What is an earnest money deposit?

It is a good-faith deposit you make when your offer is accepted, showing you’re serious. It’s typically applied toward your purchase at closing, and understanding how it works protects you.

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