A friend is in contract to buy a Co-Op and put 20K down at contract. The co-op purchase price is 250K and they were looking to get a 200K mortgage with 50K down (20K at contract and 30K at closing). The bank pre approved them for a 200K mortgage when they made the offer.
After the formal application process, the bank was concerned about the Coop balance sheet and wanted 75K down instead of 50K. My friend cannot afford 75K down....if the deal doesn't go through because my friend cannot afford to put 75K down would he lose his 20K he put down at contract? Technically he is only approved at 75K and he doesn't have that much cash so would that qualify as not being approved?
Losing Down Payment Money when under Contract
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Re: Losing Down Payment Money when under Contract
What does the contract say?SovereignInvestor wrote: ↑Tue Apr 13, 2021 9:27 pm After the formal application process, the bank was concerned about the Coop balance sheet and wanted 75K down instead of 50K. My friend cannot afford 75K down....if the deal doesn't go through because my friend cannot afford to put 75K down would he lose his 20K he put down at contract?
Re: Losing Down Payment Money when under Contract
Might be time to try another bank.
In many places you'll get your whole deposit back. The seller wants to sell their property and wrangling over the deposit can prevent them from doing so.
In many places you'll get your whole deposit back. The seller wants to sell their property and wrangling over the deposit can prevent them from doing so.
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Re: Losing Down Payment Money when under Contract
If the contract has a financing contingency and he can’t get financing, he can get the deposit money back. If he waived the financing contingency, then it might be a problem.
Before he just walks away, though, he might try a different bank or mortgage broker. Or several of them. One of my friends had a visa issue that caused problems getting a mortgage, and cycled through several banks over about four months before he found financing from some bank that catered to Indian immigrants (they didn’t care that he was Chinese) and sent out hand typed statements. I’m surprised the seller stuck with him for that long, but they did.
Before he just walks away, though, he might try a different bank or mortgage broker. Or several of them. One of my friends had a visa issue that caused problems getting a mortgage, and cycled through several banks over about four months before he found financing from some bank that catered to Indian immigrants (they didn’t care that he was Chinese) and sent out hand typed statements. I’m surprised the seller stuck with him for that long, but they did.