Talk about a roller coaster

So here's what's going on:
Lender #1, who said perviously that they would fund it no problem, backed out when they saw the appraisal document (even after having seen an appraisal from several months back, not sure what they got cold feet about there).
Lender #2, who had also said that they would fund it, demanded a bunch of ytd information plus bank statements to prove that matt actually gets paychecks. That didn't appease them. They passed on it.
Lender #3, who had also said they would fund it, has now said that instead of an 8.5% interest rate, we can get it with a 10.5% interest rate. ACK. That's only 5k per month mortgage payment. Holy moly.
Now what?

Loan contingency was released more than a week ago, so if we don't get funding at this point we're out 5k. Hey, that's only a month's mortgage...