Earnest Money

I'm more than a little annoyed with myself. KNOWING I had to have earnest money for my loan, I still paid off some debt that could have waited. In order to scratch enough cash together for the earnest money, I used one of those checks that your credit card company sends out. I know. I feel like an ass, and wonder if I'm ready for a house loan if this is how I handle the situation.

Okay, so a bit of what happened yesterday.

After low balling the buyer with a $215 offer, they countered with $237. That's a serious discrepancy, but they're only getting $223 of that, because they have to gift me $14k back so I can cover the down payment. It's called a Genesis program. This puts my mortgage (and taxes and insurance) at about $1650 a month. I have a renter downstairs who pays $950. The rest of the mortgage would be less than my current rent. Also, my GF is moving in with me, and we're splitting the costs, so I'll essentially be paying $350 a month. This leaves me a significant amount of money to do upkeep (I'll have $1,500 'free' each month, after expenses), and I'll have about $50k equity in the house right off the bat. I know, that might disappear with the market, but at least it's a buffer.

With respect to the figures I posted yesterday, I was off by a lot. The furnace is only around $2500, and I think I can get the siding done for under $15k. Also, I talked to a home inspector and he said the siding has years left if I'm careful and keep it painted. I can get the windows repaired--I found a company that will do that for a fraction of the replacement cost.

So I'm taking the risk, but it seems like a reasonable risk and a good investment. Also, I'm glad I lowballed because I think they came back with an honest "low as we can go" answer.

WRT the earnest money: it's folded into the loan, so I get it back when the mortgage goes through (I double-checked with the loan officer). Using that check, I took a $90 hit for the initial 3% interest they charge (the amount is capped at $90), and the loan is at 2.9% while it sits on my Discover card. It was frustrating, but I think it was the right decision.

One other point: I did some shopping around for different mortgage rates, and I was pleasantly surprised at how shocked other companies were by the 5.5% interest I'm getting, for a 30 year mortgage. I had a family member in the mortgage industry go over the loan terms, and she said it's a great deal, and there are no funny costs associated with it.

That's all for now. I have to wait for a day or so because two other buyers were putting in bids. I wouldn't be surprised if I get beat out, but this is my first offer, and I'm happy with the initial attempt.