Legal Question in Real Estate Law in Idaho

Re: Earnest money

Without going into more details (which would not be a good idea on an open forum such as this), it is important to know where the contract was formed, because the rules of contract of that jurisdiction would apply, and if it is not Massachusetts, the results might be different. Where a contract is involved, it will typically specify when the contract amount owed can be increased, which is one reason to have it reviewed by an attorney before signing. If the builder is claiming that the deposit is somehow "lost," that is entirely a different matter and should be addressed by the documents which you signed previously with the builder. The purchase price should not be increased absent some contractual obligation by you letting the builder raise the price under specific conditions agreed to by you.

As far as how the lender will characterize something, that is a different matter. If you are locked into using a single lender, then you need to deal with that lender, and you need to review the terms of the construction loan concerning what can be credited towards permanent financing. If you are not locked into using that specific lender, you might discuss with other loan officers of other lenders, or other mortgage brokers, whether a different outcome is possible.

Re: Earnest money

These facts are not clear enough for me to determine what you're specifically asking. However, before agreeing to anything and, especially, prior to signing any release, ask the lender/mortgage company for an "accounting" supporting its claim that only $1,000 of the $3,000 deposit is creditable to you. Then check out the numbers/analysis they provide to determine more specifically whether their position is correct/supportable.

Ideally, any settlement agreement should be reviewed by an attorney prior to signing to ensure you are not signing away rights you are not aware of.