Down Payment

A down payment is the part of a home's purchase price the buyer pays in cash instead of borrowing. It equals the price minus the loan amount, so a $500,000 home with a $400,000 mortgage has a $100,000 down payment.

Earnest money is not an extra cost on top of the down payment. It is paid early and then credited at closing, so it usually counts toward the down payment or closing costs. With $10,000 in earnest money and a $100,000 down payment, the buyer owes $90,000 more for the down payment at closing.

The two differ in timing and risk. The deposit is paid within days of acceptance and can be lost if the buyer defaults, while the rest of the down payment changes hands only at closing. Earnest money vs down payment goes into this.