Posted on: 22nd Aug, 2010 11:53 am
We are in a difficult situation. We were buying this home with 20% down payment even though contract required 5% down payment. However, we are a few days from closing now and our circumstances have changed. Wife has lost her job and even though we would still qualify for mortgage (with 20% down), we probably would not be qualified with 5%. In any case, we want to change our down payment to 5% or else get out of the contract due to contingency. However, our lender is saying that they can not change the down payments (i.e. terms of loan) once the commitment has been issued. They are asking us to withdraw our loan first before they can make any changes. On the other hand, per attorney, withdrawing from loan can be considered as us breaching the contract after mortgage contingency time was over. Any ideas on how to proceed? Is lender within their rights to refuse change in down payment?
Welcome adsforraj,
If you haven't signed any documents with your lender, you can simply back out from the contract. This won't be considered as a breach of contract. You haven't signed the closing documents. In that case, you can withdraw your loan request. The lender has all the rights to not change the down payment requirement.
If you haven't signed any documents with your lender, you can simply back out from the contract. This won't be considered as a breach of contract. You haven't signed the closing documents. In that case, you can withdraw your loan request. The lender has all the rights to not change the down payment requirement.
Thanks adonis. Do you mean that withdraing from loan will not be a breach of contract (with sellers) after we have given them mortgage commitment from lender?
If it's a verbal commitment and if you withdraw your loan request, then it won't be considered as a breach of contract.