what happens when the loan does not come through on the contracted closing date

Get Legal Help Today

Compare Quotes From Top Companies and Save

secured lock Secured with SHA-256 Encryption

what happens when the loan does not come through on the contracted closing date

what are the buyer’s responsibilities when the lender does not finalize the
loan on the contracted closing date?

Asked on June 20, 2017 under Real Estate Law, New Jersey

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 7 years ago | Contributor

The buyer is still obligated to the contract regardless of whether he or she gets the loan in time, unless and only to the extent there is a financing or mortgage contingency in the contract, the buyer is still in time to exercise it, and he or she does exercise it in accordance with its terms. Otherwise, if there is no such contingency or the time to exercise it has passed, the inability to get loan in time does not absolve the buyer of any of his/her obligations. If he/she cannot close in time, he/she will be in breach of contract: the seller can refuse to sell while keeping the deposit or earnest money, and possibly even suing for additional amounts if the seller's losses provably exceed the amount of the deposit (e.g. if the deposit would only be equal to, say, 4 months of the "carrying costs" for the property, but as a result of the buyer's breach, it takes the seller another 7 months to sell, so he or she is paying to carry the property [mortgage, taxes, etc.] for 7 more months--in that case, the seller could potentially sue the extra 3 months of cost not covered by 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 AttorneyPages.com 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.

Get Legal Help Today

Find the right lawyer for your legal issue.

secured lock Secured with SHA-256 Encryption