Earnest Money - where it goes at the closing (escrow, lenders, payment)

[newhomebuyer80]

I got a basic question, but i am confused:

Situation:
I paid $2000 to builder, as EARNEST MONEY
I will be paying $3000 at the design center as a Deposit.

So assume, I paid $5000 right now.

home purchase price is $260,000

During Closing, I am planning to pay 10% downpayment:
10% of $260,000= $26,000
$5000 I paid can be included in the $26,000 downpayment, which leaves me , i have to get $21,000 more.

or

during closing, $5000 will goes to purchase price, $260,000 - $5000=$255,000, then 10% downpayment = $25,500 , I have to colled $25,500 more.

I dont want the situation 2? whats the real scenrio?

[Daddys///M3]

Situation 1.

[newhomebuyer80]

Originally Posted by Daddys///M3

Situation 1.

Thank you sir..I am kind of releived...

[chet everett]

As long as the "earnest money" and any other "deposit" was "cash" (checks count of course, too) that should be part of your down payment. Just for your own peace of mind, you should have some sort attorney review things -- i.e. the builder needs to have an escrow account that shows the funds you've already parted with...

[brokerdave]

did you forget about money for closing costs?

[newhomebuyer80]

I still have that in my mind, I will target for lenders who charge me not more than $3000 for closing costs.
My target of savings is $30,000 before closing date. $26,000 for downpayment, $4000 for closing.
what do you think Dave?