Posted on: 07th May, 2011 04:52 am
Can I back out of a mortgage contract if my financial situation changes prior to the closing date? I was planning to purchase a house and was one month away from closing when all of a sudden my employer decided to let several personnel go due to budget shortfalls and I was one of those people so now I do not have a job. Would that be a legitimate reason to back out of a mortgage contract?
Welcome fan,
As your financial situation has changed now, you can back out from a mortgage deal. You should let your lender know about your present financial situation and cancel the deal. As the closing is not yet complete, you will be able to cancel the deal.
As your financial situation has changed now, you can back out from a mortgage deal. You should let your lender know about your present financial situation and cancel the deal. As the closing is not yet complete, you will be able to cancel the deal.
In addition to what Adonis noted, Fan; your mortgage approval would have been contingent upon your continuing in the job. Of course, loss of the job would, therefore, render you unqualified for the mortgage loan you're seeking.
What you truly would need to do is have the lender deny your application for mortgage, which would, naturally, be a simple matter for them to do. In that fashion, you'd be assured to be reimbursed for any earnest money deposit you made - not a given if you simply "backed out" of the deal.
What you truly would need to do is have the lender deny your application for mortgage, which would, naturally, be a simple matter for them to do. In that fashion, you'd be assured to be reimbursed for any earnest money deposit you made - not a given if you simply "backed out" of the deal.
