Sale agreed, loan offered less.

sunnystar25

All,

I've sale agreed for a home, however my mortgage got expired and re-applied again few weeks back. This time my mortgage has been offered 30k less and I cannot raise the difference amount to go ahead with the sale. I am thinking to pull out of the sale agreement.

Sale agreement says in the event of purchaser not able to procure mortgage, agreement can be cancelled and deposit will be refunded.

I presume I'll get my deposit back? And will there be any other legal consequences?

Has anyone gone through similar situation or have any knowledge around this?

Thanks!

Cakes and Ale

Went through this exactly. Had to pull out of the purchase, got the deposit back, but apart from the regret and the waste of time there were no other consequences. Just had to get searching again.

seamus

Yes, if you haven't signed contracts yet (and your solicitor shouldn't let you sign without a loan agreement in place), then you can withdraw from the sale and have your deposit refunded.

Go back to the vendor first and explain what happened though. No harm in seeing if they'll go ahead @ 30k less.

sunnystar25

Thanks, Seamus.

I've signed the contracts, and agreement says in the event of purchaser not able to procure mortgage, agreement can be cancelled and deposit will be refunded.

Its a new home and vendor will not go 30K less for sure.

sunnystar25

Thanks, Cakes and ale, thats good to know and a relief 'sigh'

Samuel T. Cogley

Keep that solicitor, not everyone can get a loan clause into contracts.

westsider

sunnystar25 wrote: »

Thanks, Seamus.

I've signed the contracts, and agreement says in the event of purchaser not able to procure mortgage, agreement can be cancelled and deposit will be refunded.

Its a new home and vendor will not go 30K less for sure.

Is there any particular reason why bank have reduced loan amount by 30K? Would it be worth going to another bank/ broker etc.. if you pull out now are you able to get another house within your price range with rising house prices etc?

sunnystar25

westsider wrote: »

Is there any particular reason why bank have reduced loan amount by 30K? Would it be worth going to another bank/ broker etc.. if you pull out now are you able to get another house within your price range with rising house prices etc?

My partner's job contract shows fixed term for an year when I re-applied and employer did not issue a letter stating it would be extended, so considering that bank has reduced 30k less this time and other banks refused at the application level itself as my partner is on contract for less than 2 years and most bank would need 3 years of continuos employment as a contractor.

I am thinking to go for a home that fits my budget now based on the loan approval.

Cash_Q

Most definitely go to a broker. They will have a better chance of securing the loan considering your partner's current circumstances. Some brokers charge but ours doesn't. Pm me for his details, I would highly recommend him. He can tell you within a couple of days where you stand. Rather that than pulling out and trying to find another house you like and be lucky enough not to be outbid.

GingerLily

Samuel T. Cogley wrote: »

Keep that solicitor, not everyone can get a loan clause into contracts.

To be fair most developers won't allow it these days, it's a sellers market...

The_Conductor

Samuel T. Cogley wrote: »

Keep that solicitor, not everyone can get a loan clause into contracts.

+1
Most sellers/developers- will remove you from contention in a purchase- if you insist on a clause such as that- your solicitor has just saved you the price of the deposit- it would normally be forfeit as you have signed contracts...........
I'd be buying the solicitor a nice bottle of whiskey as a thankyou.

sunnystar25

Luckily, developer agreed to transfer the sale contract to a different home which is little less in the price.

We are good and signing the contract for a new home

Thanks all for your time and responses.

GingerLily

sunnystar25 wrote: »

Luckily, developer agreed to transfer the sale contract to a different home which is little less in the price.

We are good and signing the contract for a new home

Thanks all for your time and responses.

Great news!! Good luck with the new place