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Buying and Selling Homes

How can I lose my Down Payment?

14 years ago

I'm going on Friday to place a cashier's check deposit of $6,000 on a house that my wife and I want to buy.

We have a pre-qual, of course, but the underwriter has not committed yet. Settlement is on the 29th of May and our broker is ordering an FHA appraiser as I speak. An issue is that another mortgage broker who was not satisfying us had an appraisal done, which I actually scheduled with the appraiser and paid for, and now won't transfer it to the new broker.

So we have a few weeks left, but if the loan does not come through, do we lose the $6,000 deposit?

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Comments (8)

brickeyee
14 years ago
What are the terms of the purchase contract?
Most contain a financing clause.
If you cannot obtain financing at a specified rate and amount the contract is void.
mariend
14 years ago
Talk to a RE lawyer for advice. If it only an appraisal problem, get a new one and tell your old broker you want the appraisal because you paid for it they did not and are not entitled to it.
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Linda
14 years ago
Most banks don't accept the appraisal of another bank which is probably why they are making you get another one. You don't say if this is a FSBO or thru a realtor. Make your offer contingent on obtaining acceptable financing, if you don't get the loan, you don't lose your downpayment money.

Whats the reason for going FHA? The only issue with an FHA loan is they do an "FHA Appraisal" which means certain issues with the house have to be taken care of before closing. (peeling paint, the roof has to have at least 3 years of life on it, railings on all stairways, etc). If this is a foreclosure or a property in need of alot of repair, FHA might not be the way to go.

I know FHA loans are going to be the new thing in the very near future because of the tightening up of 95% loans. But in my experience, mortgage brokers don't explain them fully and only say buyers need to put down less money. Later on down the line issues either have to be paid for by the buyer before closing to correct or if the seller has agreed to the FHA financing, renegotiations could take place to fix items needed for that type of financing. If you are working with a realtor, MAKE SURE they know you are going FHA. (In NY, it needs to be presented as part of the offer).
marys1000
14 years ago
Linda - nice to see you back.
Pipersville_Carol
14 years ago
There are many things that could cause you to lose your down payment. It all depends on how the contract is written.

Hiring a real estate attorney to check your contract is the best way to protect against this and get accurate answers to your questions.
richardallen
14 years ago
You SHOULD be worrying about the other end of the deal....Home prices going down for another couple of years , so that $6,00 is chicken feed to the bigger loss you could have by buying at the wrong time.

===================================
So we have a few weeks left, but if the loan does not come through, do we lose the $6,000 deposit?
berniek
14 years ago
"You SHOULD be worrying about the other end of the deal....Home prices going down for another couple of years , so that $6,00 is chicken feed to the bigger loss you could have by buying at the wrong time."

How do you know where he's buying?
I'm selling AND buying and I think it's the best time to sell and buy where I am.
western_pa_luann
14 years ago
"Home prices going down for another couple of years "

Give me a break... prices have NOT gone down here. Sure, we did not ride that bubble, but because of that we are progressing slowly and steadily upwards.

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