Builder to buyer: You no longer qualify

Q: My husband and I are building a house with a big, new construction company. We put down $10,000 in earnest money when we signed the contract back in June.

The contingency clause in the contract said the earnest money was refundable if we failed to qualify for a mortgage within 30 days of signing the contract. We went with the builder's in-house lender (to get all the incentives) and were approved.

At the same time, we were in the process of selling our house. But our buyer is having trouble getting his mortgage in order. When we qualified in June, it was for a low-down-payment mortgage. We hadn't yet sold our house, so we couldn't show that we had enough proceeds for a larger down payment.

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