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do you lose the money you put down on contract if you are not approved for the mortgage?

by karyfields99853 from Webster, Texas. May 4th 2015 Reply


Mindy McArthur (mindyefg@gmail.com)
#235 ranked lender in Texas - 2 contributions

Hi Kary! If your loan is denied within the allotted time on the financing addendum you should not lose your earnest money.

May 4th 2015
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Mindy McArthur (mindyefg@gmail.com)
#235 ranked lender in Texas - 2 contributions

Hi Kary! If your loan is denied within the allotted time on your financing addendum you will not lose your earnest money.

May 4th 2015
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Chris Samples (csamples)
#142 ranked lender in Texas - 82 contributions

As part of an executed purchase contract, you and the seller typically agree to a "financinig contingency" period which is allows time for your loan to be processed for conditional approval. If your loan is not able to be approved, as long as you are still within that alotted period of time, you can cancel the contract and your earnest money will be returned.

May 4th 2015
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Derick Condron (rightstartoregon)
#32 ranked lender in Oregon - 598 contributions

It will depend on the contract between you and the seller. In most situations there is a financing contingency that is in the contract, this would protect your earnest money.

May 4th 2015
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Joe Metzler (JoeMetzler)
#1 ranked lender in Minnesota - 3,944 contributions

Depends on how your real estate agent wrote up the purchase agreement. If they wrote in a lending contingency, then it should be no problem. If they didn't, well, don't expect any money back. The whole idea behind earnest money, is that if the seller is going to accept your offer and take the home off the market, that you are serious about moving forward. If you back out, they keep your earnest money for wasting their time.

May 4th 2015
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Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,240 contributions

Typically - no, but the terms of your contract/purchase agreement may say something different. If you're not sure ask your Realtor or get legal advice

May 4th 2015
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William J Acres (William_Acres)
#73 ranked lender in Arizona - 8,726 contributions

Each state is different, but most all purchase contracts state your earnest money is refundable if you cannot obtain financing.. but this would be a question for your realtor who wrote the contract for you.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com

May 4th 2015
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Ralph Richard Guertin (ralph@absolutelowrates.com)
#136 ranked lender in Florida - 796 contributions

All good answers and as long as you are making a good faith effort to obtain financing and meeting your contract date milestones for that financing contingency period, I have also seen people go past that date and still with proof of a good faith effort and still get declined get there money back but please consult your realtor and/or a real estate attorney if you are in that situation.. Good Luck

May 5th 2015
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