That earnest money deposit will be applied to the funds that you owe at closing. It may cover all of the funds you owe, or you may still have to come in with additional funds. Say for example if you are buying a $300k home with FHA financing, your down payment will be $10,500 (3.5% of the sales price), and if you put down an earnest money deposit of $5,000 then the remaining $5,500 will be owed from you at closing. You also have the lender fees as you are aware (underwriting, appraisal, credit report), and there will also be title insurance, an attorney closing/settlement/escrow fee, and various other fees that are being charged by the title company. All of those other fees usually are owed at closing (other than the appraisal fee which usually has to be paid at the time the appraisal is done). Let's just say for this example those lender/attorney/title fees are $6k - these are called "closing costs" or "settlement costs".
Now if you have negotiated the seller to pay you a "credit" towards your settlement costs, then part/all of the $6k in other fees would be paid for by the seller and you would owe the remaining amount. So in this example if the seller agrees to pay $5k in "buyers closing costs" then you would owe the remaining $1k in closing costs + the remaining $5,500 of the down payment.
In Illinois there is also a "pro-rated property tax credit" that you get from the seller, but I won't go into that as it may add confusion to the specific question you asked. Your eventual loan officer & real estate agent can go over those details because the amount of the pro-rated tax credit will depend on what the current property taxes are, when the seller has paid their property taxes through & exactly what date you would be closing on.
Shane Milne | Lending in all 50 states | NMLS #81195
The down payment is due at the closing. Most lender fees are paid at the closing as well. Some fees , are paid at the time of application, most notably the cost of the appraisal and the application fee . When you get a RESPA closing statement it will show the fees already paid as POC , closing talk for paid outside of closing.
Hope this helped,
Broker / Owner
Oak Park Illinois 60302
Oak Park Realtor Association's "Realtor of the Year 2008"
You should have been told this information by your loan officer.
I do agree with Ron that there seems to be a lack of communication there.
I would call your lender today and go through the details with them.
The only money you should have had to pay upfront would be the money for the home owners insurance (paid to insurance commpany) and home appraisal.
I wish you luck with this issue...
Senior Loan Originator
One Mortgage INC.
The Escrow cannot Close with this.
They usually call you and give you a copy of the HUD1 which shows the breakdown of the expenses and fees for both the Buyer and the Seller.
They will tell you what they need.
Why do you have such poor communication.
Talk to your Realtor.
Call your Escrow Officer.