Earnest money not being refunded

[newmomnewme]

I think I just have to take this loss.

I paid a $3000 earnest money deposit 2/28 for a new townhome scheduled to be closed in June. 

I explained to the in-house lender how much I could afford; when she sent loan disclosures 3/5, I told her that I couldn't go through with the purchase because I couldn't afford the upfront costs (I thought I could get my EMD back within 7 days) 

I requested a refund of my earnest money deposit and was told that I would lose it because I wasn't denied a loan. 

I am pissed...should I just consider this as a lesson learned?

[JVille]

Your Real Estate Agent should be assisting you with this! You have an agent, correct??? And yes generally they are correct depending on how this transaction is written. Have they started building or wa the Home under construction. Many builders would just cancel the transactions regardless as you have not tied up the home but a couple days. Who said no? Maybe you are asking the wrong person.
Legally you may well have learned a very expensive lesson. Don’t sign anything until you have the financial details in full UPFRONT! I’m so sorry.

[CreditInspired]

Hi OP
What do you mean by upfront cost? Do you mean closing costs? Because, if you don’t have the funds to close the deal, I don’t think you would be approved anyway.

I think you should get exact info from the sales person and personally, if it were me, I would not give up easily on that $3K EMD even if I had to take my complaints to the General Contractor or whomever is in charge.

[JVille]

CreditInspired is absolutely correct, “Insufficient Funds to Close” is a reason to Decline the Loan.

[Anonymous]

Agree with posters above -- if you cannot afford to purchase the property, that should be sufficient to remove the contingency.

Furthermore, if you live in a hot housing market, like most areas are, there will be plenty of other buyers. You should absolutely not lose this $3k.

[newmomnewme]

Thanks everyone! I do not have a real estate agent. Yes, I meant closing costs...even with the assistance, they wanted 40k total.

It is a new community (Ryan Homes and NVR financing). The sales rep told me that if my loan was declined, I could get my EMD back. 

I didn't want to miss the builder incentives, and the base prices were already going up 10k....so I gave up the 3k. 

I didn't fill out the loan disclosures because I can't afford the monthly payment and don't have the 40k to bring to the table. 

Maybe I should just send all of my bank statements and tax returns so they can decline the loan, then I get my money back. 

When I spoke to the sales rep yesterday, he said that I wasn't denied financing and there were several other options to explore. 

I explained that I wanted to be in a better financial position before purchasing. 

I plan to apply for mortgage loans as soon as the following criteria is met: 

• 700+ mid mortgage score 
• $1000 max in min. monthly payments (loans and cc) 
• 20% or more in savings (I upped my 401k on both jobs to 10%) 
• 2+ years at 2nd job

[JVille]

You actually need to fill out the Loan Application in order for your Loan to be declined. If you do not have sufficient cash to close that alone will get the loan declined. However, I’m betting you had “so many” days to make formal loan application and your comment above now gives me the idea you may already be in violation of the terms of your contract for failure to make official application.
You need to pursue getting your money back!

[newmomnewme]

I gave the EMD on 2/28....in time for the incentives etc..ugh. 

Are you agreeing that I sign the loan disclosures so the finance rep can send docs to underwriting for approval? 

[CreditInspired]

IMHO, yes and agree with @jville. You will not qualify for loan if you don’t have funds to close. I couldn’t even get a preapproval from NFCU until I presented proof that I could withdraw funds needed for closing from my 403b.

[JVille]

Did you fill out an application and (super important) provide bank stmts showing insufficient funds and W2’s and paystubs?

Exactly what financial info did you provide for the UW to review? What type of loan did your contact say you were applying for? That’s the loan you want declined, not a Counter Offer of some other type of loan they may offer.
But without a formal loan application they can not Decline you. Once again did your contract specifically spell out the loan you wanted to obtain? And do you actually have funds to close that specific loan? The devil is in the details (fine print).