Well, my last house-building-related post said that we were still waiting for a bid from our contractor. We got it and he was 13% over our budget. Granted, he was estimating on the high side for a lot of things to make sure we were covered, but 13% is still a lot. We worked with him to cut this down a little bit. We've had to save some things for another time (like the deck off the back).

When it was all said and done, we got our second revision of the bid which was still 5% higher than our original target. We were pretty happy with it, but we weren't sure how the bank would respond to approving us for 5% more. Additionally, the interest rates had gone up .625% since I was originally pre-approved. Well I went back with my new number and the higher interest rates and had a new pre-approval letter the next day! Now that's service.

I think a HUGE key to getting financed near your debt-income ratio maximum, is the amount of down payment you are making. In our case, we are making a 20% down payment which also allows us to avoid the Private Mortgage Insurance (PMI), and allows us to skip the escrow account. We want to scrip the escrow account so we have a little more control over our tax and insurance payments.

Anyway, I fully expect to interest rates to come down the second half of the year here. Actually, I've already seen a little bit of a dip. And if my theory about interest rates and gas prices is correct, we should see further drops in rates corresponding with the recent gas price drops.