Buying in Delano and wondering how much cash you really need upfront? You are not alone. Many first-time and move-up buyers mix up earnest money and the down payment, which can make budgeting confusing. In this guide, you will learn what each payment is, when it is due, typical amounts for Minnesota buyers, and how to protect your deposit in a 55328 offer. By the end, you will have a clear, local plan for what to save and when to send it. Let’s dive in.

Earnest money basics

Earnest money is a good-faith deposit that shows a seller you intend to close. The funds are held by a neutral escrow or title company as stated in your purchase agreement. At closing, your earnest money is credited toward your total funds needed, such as your down payment or closing costs.

Key points to remember:

• It is not the same as your down payment.
• It is paid soon after your offer is accepted, not at closing.
• It sits in escrow until you close or cancel under the contract terms.

Down payment basics

Your down payment is the portion of the purchase price you pay at closing from your own funds or eligible gifts. It represents your equity contribution when the lender disburses the loan. Depending on your loan program, minimums vary:

• FHA loans often require a minimum of 3.5 percent for eligible buyers. You can review FHA basics through the U.S. Department of Housing and Urban Development’s overview of FHA home loans.
• Conventional first-time buyer programs may allow 3 percent down through options like Fannie Mae HomeReady or Freddie Mac Home Possible, subject to lender rules.
• VA loans offer 0 percent down for eligible veterans and service members. Learn more on the VA home loan page.
• USDA loans offer 0 percent down for eligible rural properties and borrowers. See the USDA Single Family Housing Guaranteed Loan Program for details.

How much to budget in Minnesota

Typical ranges can vary by market and price point, but here is what we commonly see in Minnesota, including Delano and neighboring western suburbs.

• Earnest money: Often 1 to 3 percent of the purchase price, or a flat amount between 1,000 and 5,000 dollars in many transactions. Lower-priced homes may use fixed amounts like 1,000 to 2,500 dollars. In competitive situations, buyers may offer closer to 2 to 3 percent to strengthen an offer.
• Down payment: Minimums depend on the loan program. FHA often 3.5 percent. Some conventional options as low as 3 percent for first-time buyers. Many conventional buyers choose 5 to 20 percent. At 20 percent, you typically avoid private mortgage insurance.
• Closing costs: Plan for 2 to 5 percent of the purchase price, which usually includes lender fees, title charges, and prepaid items like taxes and insurance.

A local agent in Wright County can advise on the earnest money amount that aligns with your price point and the competitiveness of the property.

When you pay each item

The purchase agreement sets the exact timing. In many Minnesota deals, buyers deliver earnest money within a short window after offer acceptance, often 24 to 72 hours or the number of days written into the contract. It is critical to meet this deadline.

Your down payment is due at closing. A lender must provide your Closing Disclosure at least 3 business days before closing so you can review the cash to close and how your earnest money is credited. You can see an overview of the form on the CFPB Closing Disclosure page.

How the two work together

At closing, your earnest money is applied to your total funds required. Here is the flow:

• You deposit earnest money shortly after acceptance.
• You complete inspections, appraisal, and loan approval.
• If the deal proceeds, your earnest money reduces the amount you must bring to closing.
• If you cancel under a valid contingency and within the timeline, the earnest money is typically refundable per the contract.

How contingencies protect your deposit

Buyers in 55328 commonly rely on several protections that can make earnest money refundable if a deal falls apart within the agreed timelines:

• Inspection contingency: Allows you to cancel or renegotiate after inspection within the set window.
• Financing contingency: Protects you if you cannot secure loan approval by the deadline.
• Appraisal contingency: If the appraisal comes in low and you cannot reach a solution, you may cancel and recover your deposit.
• Title contingency: If clear title is not possible, you can typically cancel and get the earnest money back.

Always track your contingency deadlines. Missing them can jeopardize your ability to recover your deposit if you need to cancel.

Local tips for Delano and Wright County

• Market conditions matter. In a seller’s market, consider a stronger earnest money amount and tighter timelines to stand out. In a balanced market, standard amounts and contingency windows are more common.
• Use a neutral escrow holder. Your contract will name a title or escrow company that will hold the deposit. Do not give earnest money directly to the seller.
• Confirm payment method. Many title companies require certified funds or a wire for larger deposits. Verify instructions to avoid delays.
• Ask about assistance. Minnesota Housing and regional nonprofit partners sometimes offer down payment assistance and homebuyer education that can affect documentation and timing. Explore options at Minnesota Housing.
• Check USDA eligibility. Some areas qualify for USDA 0 percent down loans. Your lender can verify property eligibility, or you can review the USDA program details through the link above.

How to budget your cash upfront

Before you write an offer in Delano, build a simple budget:

• Earnest money deposit per your offer.
• Inspections and appraisal fees you may pay during the process.
• Down payment based on your loan type.
• Closing costs at 2 to 5 percent of price, including prepaid taxes and insurance.
• Subtract your earnest money from the final cash to close at signing.

Your lender can prepare a preapproval and estimate of cash to close so you know exactly what to expect. The Closing Disclosure you receive at least 3 business days before closing will show the final numbers.

Use The Realty Lab mortgage calculator

A quick way to compare options is to run multiple down payment scenarios using The Realty Lab’s mortgage calculator. Here is a simple approach:

• Gather inputs: price, down payment amount or percent, interest rate, loan term, property tax estimate, homeowners insurance estimate, HOA dues if any, and PMI if your down payment is under 20 percent.
• Run three scenarios: minimum down payment for your program, 10 percent down, and 20 percent down.
• Compare monthly payment and total cash to close side by side.
• See how earnest money affects timing: for example, increasing earnest money from 2,000 to 6,000 dollars raises the cash you need shortly after acceptance but lowers what you bring to the closing table by the same amount.
• Save or screenshot your results to review with your lender and agent.

Example: 350,000 dollar purchase

The numbers below are illustrative. Your exact figures depend on loan program, interest rate, property taxes, insurance, and closing costs.

• Earnest money at 1 percent: 3,500 dollars, delivered shortly after acceptance.
• Down payment options:
  • FHA at 3.5 percent: 12,250 dollars.
  • Conventional at 5 percent: 17,500 dollars.
  • Conventional at 20 percent: 70,000 dollars.
• Estimated closing costs at 2 to 4 percent: 7,000 to 14,000 dollars.
• Cash to close at signing: down payment plus closing costs minus the earnest money you already deposited.

This is a simple framework you can customize with your lender’s current rates and your property’s tax and insurance estimates.

Questions to ask your lender

Bring this checklist to your next call with a local lender:

• Which loan programs do I qualify for, and what are the minimum down payments for each?
• Do you offer Minnesota Housing assistance or work with state and local programs?
• What earnest money amount is competitive for Delano offers right now at my price point?
• How soon must earnest money be delivered after acceptance, and what payment methods do you accept?
• Which title or escrow company will hold the deposit, and how will it be credited at closing?
• What is my estimated cash to close, including an earnest money credit, and can you share a sample Closing Disclosure?
• What are current interest rates, and how long can I lock?
• What fees and closing costs should I expect, and which might be seller-paid or financed?
• If I use gift funds, what documentation will you need?

Next steps for Delano buyers

If you are planning an offer in 55328, line up two things early: a strong preapproval and a clear plan for earnest money delivery. From there, use your mortgage calculator scenarios and the lender’s estimate to fine-tune your budget. If you have questions about local norms for earnest money, contingencies, or title companies in Wright County, our team is happy to share current insights and coordinate next steps.

Ready to map out your cash to close and write a confident offer in Delano? Connect with our local team at The Realty Lab for guidance, lender introductions, and step-by-step support from offer to closing.

FAQs

What is earnest money in a Minnesota home purchase?

• It is a good-faith deposit held by a neutral escrow or title company and later credited toward your down payment or closing costs at closing.

How much earnest money is typical in Delano 55328?

• Many Minnesota offers use 1 to 3 percent of price or a flat 1,000 to 5,000 dollars, with higher amounts common for competitive listings or higher price points.

When is earnest money due after offer acceptance?

• Your purchase agreement sets the deadline, often within 24 to 72 hours or the number of days written in the contract, so plan to deliver it promptly.

Is earnest money refundable if financing falls through?

• If your financing contingency is in place and you follow the timeline, the deposit is typically refundable according to the contract terms.

How is earnest money applied at closing in Delano?

• It is credited on your Closing Disclosure and reduces the cash you must bring to closing, since it counts toward your total funds needed.

What are common down payment minimums for local buyers?

• FHA often 3.5 percent, some conventional programs 3 percent for first-time buyers, and VA or USDA 0 percent for eligible borrowers.

Do I need 20 percent down to buy in Wright County?

• No, although 20 percent often avoids PMI, many buyers use lower down payments based on program eligibility and monthly budget goals.

Where can I learn about Minnesota down payment assistance?

• Start with Minnesota Housing and ask your lender which state or local programs you may qualify for and how they interact with your loan.