Mortgage aplication co-borrower

UPDATED: Sep 30, 2022

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Mortgage aplication co-borrower

Applied for a mortgage, lender said we
need a co-borrower bc of credit issues.
Lender got info from co-borrower. Co-
borrower changed mind, backed out.
Lender said they would send denial
based on our credit but in error denial
letter says applicant withdrew. We
lost deposit. However co-borrower
necer techically signed application.
Shouldnt we legally be entitled to get
our deposit back?

Asked on February 21, 2017 under Real Estate Law, New York


SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 5 years ago | Contributor

You are only entitled to get your deposit back if your contract of sale specifically stated that under this circumstance, you would receive your  deposit. Otherwise, it is not the seller's concern or issue why you were denied financing--all that matters is that you could not go through with the sale. If you can't go through with the sale  for any reason not the seller's fault, the seller can keep the deposit.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.

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