Can I lose my deposit if loan not approved due to sudden lack of income?
This is a follow up to a question from earlier, I was approved for a loan based on a full time income, but now I am only allowed to work part time hours due to doctors orders. I understand the lender can back out of the loan (which is a conventional loan not a FHA as someone thought earlier due to the amount of the down payment that I was putting down), however I also put down a substantial deposit up front and I was wondering will I lose that deposit as a result of the lender not being able to approve the loan. by kinglemon87 from Orange Park, Florida. Apr 13th 2011
JULIO RABEIRO (LENDINGTRADE)
#48 ranked lender in Florida - 5 contributions
If your loan it's contingent to financing and you provide all the paper work necessary for a loan processing on time . you are entitle for a full refund on your deposit.remember the escrow deposit it's a bona fide deposit .if the contract it's contingent to financing and no financing can be obtained the deposit shall be refunded in fullregards Julio Rabeiro
Gianni Cerretani (mortgagegodfather)
#32 ranked lender in Georgia - 238 contributions
I agree with the other lenders but if you went past your financing contingency in the purchase and sale contract, which it sounds like you did then the seller by law has the right to keep your earnest money-while unethical its still legal. If you are still protected under the financing contingency then the lender can write you a letter of loan denial due to income and you will get your earnest money back without a question.
Chris Gummerson (cgummerson11)
#397 ranked lender in California - 648 contributions
I agree with the above answer. In my experience, most every contract has the financing clause contingency. If it does not, if the reason for the denial was out of your control, generally the seller will not instruct to keep your deposit.
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