What happens to earnest money at closing?

At closing, the escrow holder applies your earnest money to the purchase. It is subtracted from the cash you need to bring, so you do not get it back as a check. On a $500,000 home with a $15,000 deposit, your cash to close drops by $15,000.

The Closing Disclosure shows it as a deposit credit in the table that calculates your cash to close. If your credits ever add up to more than you owe, which is rare, the difference is paid to you at closing.

The deposit stays with the escrow company, title company or attorney until that point. Then it goes into the same pot as your down payment and loan funds, and the seller is paid from the total. The guide on earnest money vs down payment shows how the numbers line up on the closing paperwork.