Home Buying in 20019>Question Details

Kenyetta Tay…, Home Buyer in Washington, DC

Earnest Money deposit

Asked by Kenyetta Taylor, Washington, DC Sat Aug 31, 2013

If a lender changes the terms on a loan contract will I have to forfeit my earnest money deposit. I initially signed off on a 3.5% down payment. Now they're changing it to a 5% down payment which I can't come up with. Will I forfeit my earnest money deposit. They just sprung this on me.

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Answers

7
An extension was granted but the seller put in these clauses

1. Buyer will provide an additional $2,500 in earnest money deposit.
2. $5,000 Earnest money deposit is non-refundable.
3. Lender provides a statement that all other conditions of the loan have been met and the only outstanding issue is the absence of the tax transcripts.
4. Settlement must take place on or before Friday, September 20, 2013.
5. If settlement does not take place as scheduled, contract is considered null and void and earnest money deposit is immediately surrendered to seller.
All other terms and conditions remain the same, in full force and effect.

I am not willing to provide an additional 2500 and once again how is my earnest money deposit in question if I can't get the financing.
I hope I don't have to get a lawyer involved. :(
0 votes Thank Flag Link Tue Sep 3, 2013
I'm not agreeing to an additional 2500. This is not my fault. This is between the agents and the lender.
Flag Tue Sep 3, 2013
Did you agree -- meaning, did you sign off on -- the seller's granting of an extension of time for you to obtain financing with the additional conditions that the seller requested and you outlined above?
Flag Tue Sep 3, 2013
No you should not lose your deposit, Kenyetta. It sounds to me that you have a written, ratified contract with a seller. Among the terms of this agreement was a financing contingency (purchase by you was conditional upon your ability to get a loan aka financing). You can no longer get the financing as stated in the contract you and the seller agreed upon. If no other lender will give you this financing, and the seller doesn't offer to give you the financing the contract called for, you can cancel the contract of sale and sign a formal Release of the Deposit, which the seller must also sign, and you earnest Money deposit should be returned to you.

Good luck,

Linda Hughes, Realtor
0 votes Thank Flag Link Sat Aug 31, 2013
You may want to also contact other lenders as others have suggested. I would start with BB&T as they have some pretty good loan programs these days. I would do this now and based upon what your lender is putting you through, I would have no reservations switching to a new lender.
0 votes Thank Flag Link Sat Aug 31, 2013
Make sure you are within that time frame on your contract. The lender might try to string it along until the last day. Are you using an agent? If it falls through, you will need a rejection letter from the lender and then a release sent to the buyer agent before the financing contingency is up. Hopefully this will work out, however in the future there are lenders that can get underwriting to review everything prior to you getting into another contract. Feel free to contact me if you need further assistance.
0 votes Thank Flag Link Sat Aug 31, 2013
Thanks my agent made sure I was able to get my money back.
Flag Wed Sep 11, 2013
Ok thanks, I checked and there is a contingency for financing, so I won't lose it. The loan officer is trying to get the underwriter to push i through. The reason they asked for the additonal 1.5% is because they said that my debt to credit ratio was high and my credit isn't stellar. We couldn't use my fiance's on the loan because of his lack of credit and past credit issues. I have both of our cars in my name but he pays the utilities and the car insurance for both vehicles so it equals out. But I came up with the 3.5% but I will not be able to come up with the rest. So hopefully this works or I'm backing out.
0 votes Thank Flag Link Sat Aug 31, 2013
Hi Kenyetta,
Please give me a call on 2404267229. Every situation is different and if there is time in your contract, I may be able to help. You are not obligated to use that lender. I have dealt with these situations before, you need a lender that will be able to process your paperwork quickly, so time is of the essence.- Valerie Riggs
0 votes Thank Flag Link Sat Aug 31, 2013
Hi Kenyetta,

Read your purchase contract. If there is a contingency for financing and it has not been removed in writing, you should not lose your EMD if you cancel contract. If you have removed the contingency in writing you could lose your EMD - the seller doesn't HAVE to keep it but they could if you've removed financing contingencies in writing.

Shanna Rogers
SR Realty
http://www.RealtyBySR.com
0 votes Thank Flag Link Sat Aug 31, 2013
You may want to also contact other lenders as others have suggested. I would start with BB&T as they have some pretty good loan programs these days. I would do this now and based upon what your lender is putting you through, I would have no reservations switching to a new lender.
Flag Sat Aug 31, 2013
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