Can the lender change the amount of the required downpayment just 9 days prior to closing?

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Can the lender change the amount of the required downpayment just 9 days prior to closing?

I am buying a second home (a condo) and was told I needed 20% down and approved me at 20% down. We have locked, got the appraisal, have a contract and now 9 days before closing the lender e-mails me and tells me he made a mistake and I need to put 25% down instead. That will stretch me financially and I did not plan on that. Is this legal? Is there anything I can do?

Asked on September 12, 2011 under Real Estate Law, Illinois

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 10 years ago | Contributor

Unfortunately the lender for a loan unless you have a written agreement (signed by you and the lender) specifically stating that you have the loan for so much down and at a certain rate for so long can change its terms that it initially submitted without any recourse to it.

Hopefully you did not waive your loan contingency concerning the purchase of the second home that you desire. I suggest that you take the position that the loan was twenty percent (20%) down and the mistake by the lender's representative is his mistake, not yours and you relied upon his representations in entering into your contract to buy the unit and see what transpires.

Perhaps you can close with twenty percent (20%) down. Have you spoken with your real estate agent or mortgage broker about the current issue?

Good luck.


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