Is a earnest money deposit refundable if you were given conditional loan approval but then your loan application was denied?
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Is a earnest money deposit refundable if you were given conditional loan approval but then your loan application was denied?
Asked on September 17, 2015 under Real Estate Law, Florida
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
It is only refundable if the contract or agreement of sale contained what is commonly known as "finance contingency," or a clause or provision stating that if you lost or could not obtain financing, you'd receive your deposit back. Otherwise, regardless of why you lost the loan, or whether or not you were at fault in any way, if you can't go through with the purchase such as due to a loss of funding, the seller may keep the earnest money.
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