Posted by River City on January 06, 2007 at 15:49:02:
It doesn’t matter what the loan application papers say. It appears you agreed to do something that is not possible for you to carry through and you stand a good change of losing your deposit. Buying and selling real estate is a life of hard knocks. I feel for you.
A couple more questions.
Who helped prepare the contract? A realtor or a builder’s agent? Did you tell that person that you had to sell your current residence in order to have funds for closing, and also to qualify to make the payments?
If the answer to these questions is “yes,” you might have some recourse and should consult an attorney because these items should have been put in the contract.
Another thing to look at is that you did not obtain full approval from the lender. You obtained a contingent approval. It was contingent on your selling your current residence to qualify for the loan and also to have funds to close. A “full” approval is one that is dependent on standard items at closing such as a survey, title policy, termite inspections, etc. A full approval is one that has been totally satisfied by the applicant (you).
Good luck. And, next time before you sign a contract, have an attorney read the documents. If you were more knowledgeable about real estate contracts, this would not be necessary. However, it appears you need some assistance.
Can I get my deposit back for a home purchase - the deposit was paid almost a year ago and things have changed drasticly. The house is now built - and I cannot afford the mortgage - my other house is not sold yet, and my income will never cover two mortgages. My question is would a deposit be refundable if I am not approved for the mortgage. I have not gone to closing yet. What can I do?
Do you have an attorney? If not, why not? This is contract law stuff which attorneys can advise you on. It looks like you have no mortgage contingency clause which makes your deposit eligible to be kept by the Seller.
what is worst, having your deposit kept by Seller and not closing or,
closing knowing you can’t afford 2 houses and can’t pay the notes?
I bought and sold a house without an attorney once and got burned so bad that I don’t buy or sell without an attorney to protect me. That’s what they get paid for.
Call one immediately, but it may be too late. Everything is a lesson or a Blessing.
Posted by River City on January 04, 2007 at 11:11:12:
Read your contract. Does it state that you must sell your current residence? Does it state that this purchase is dependent on your obtaining a mortgage? Read your contract, every word of it.
In the loan papers which I signed a year ago - it shows my assets - my house stating “will sell prior to closing”, b/c they knew that was the funds for my down payment.
Contract does not speicifally say must sell current residence.
The contract seems somewhat standard, “standard home contract provisions”
Section of contract under Mortgage Provisions.
“lenders withdrawal of approval for any reason after approving Buyer, Buyer will not be entitled to terminate the Contract, Seller may deem Buyer to be in default under the Contract and Seller will retain Buyer’s deposit in full or at Buyers requst Seller may deem the mortgage contigency removed, and this Contract shall proceed as a cash sale”
I believe I had to file an loan application and most likley was approved due to the amount I was going to put down at closing. But now I don’t have the money to put down at closing. The original application was done in Feb 2006. Shouldn’t the mortgage company redo the application which would show that I cannot afford to buy this house. Then I would end up being in default.