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Hi all,
Does anyone know what % down is required at P&S and up to what % we get back?
I apologize if the question isn't worded correctly - it's confusing and I don't exactly understand it, but we are trying to put an offer on a home this afternoon.
If we use USDA it's 0% down, so we're wondering if there is a max % we can get back at closing. It may affect our request for closing cost assistance.
You are probably past this point now - but typically the earnest money amount will be dictated on local customs and the sales price amount you are offering. In most areas with sales prices of $100,000 or less usually $500 is an acceptable earnest money deposit, sometimes the sellers want you to put down 1% of the sales prices as your earnest money deposit. It all varies.
Since USDA financing is 100% financing, the earnest money deposit you put down will be credited towards any closing costs due from you at closing. So if your sales price is $100k and you put down a $1k earnest money deposit, and your closing costs are $5k, then you would still owe $4k more at closing. The seller can also pay your closing costs if you ask them to in your offer, so if the seller is covering all of the closing costs, in that above situation you'd get your $1k back at closing. USDA also can go up to the appraised value of the home to finance closing costs, even if the purchase price is less. So in the above situation, let's say the seller isn't paying your closing costs, and the home appraised for $105k, you could get a loan amount of $105k to cover the $100k sales price + $5k in closing costs AND be able to get your $1k earnest money back.