Earnest Money Refund??? - who pays first?

[jamied66]

My wife and had our offer accepted on our first home this past Monday. Great house. nice neighborhood. great deal. We can't wait. Closing at the end of February.

When we were coming up with the offer we were talking with our mortgage broker and she gave us an idea for a GFE (making some estimates). We then took that number and (about $6450) and added it to our offer for the house. We then asked for a $6000 concession for closing costs (We were also putting down $500 in earnest money, so that should cover most all of the closing costs, we thought.)

Our offer was accepted. We were paying $116k for the house, and they were paying $6000 in closing costs.

When the real GFE came back our broker discovered that some of her estimates were high, and this loan is going to close at approximately $5800.

The vergage in our signed sales contract says "Seller to pay all points, prepaids, and closing costs up to $6000".

I have 2 questions.

1. Our earnest money deposit isn't needed to cover the closing costs of the loan. And since the verbage they agreed to clearly says "ALL closing costs", should I get a refund at closing of my earnest money deposit?

2. I just paid the appraisal fee ($300) to our broker today, should I also be credited back with this at the closing table?

This is our first purchase, so we really don't know much about how the process works. All opinions are appreciated.

[Gadfly]

Earnest money (IE down payment) is deducted from the total cost of the home. The loan is based on this adjusted total. You have nothing coming back.

BTW, look closely at your HUD-1 and do the math yourself. In reality YOU are paying the closing costs.

[jamied66]

Thanks.

I'm aware that we are in fact paying the closing costs. Simply a "slip of the tongue" because it seems that way.

OK, so our earnest money will come off of the purchase price, and then the sellers' "concession" will cover the closing costs.

Do I have that right? If so, why would our loan fund for $116,500 (the offer price) instead of $116,000 (the amount after after deducting our deposit)

and 2. Will we be credited back for the appraisal since our contract states that they "pay all points, closing costs, and prepaids"? If so, where will that come into play since we won't actually be writing a check at the closing table?

Thanks again.