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Safeguarding Deposit on House

I recently put a deposit a house. If I don’t qualify for a mortgage can I get out of the purchase Please advise. Thanks. John.

Hi Guys, 

I recently put a deposit a house.  If I don’t qualify for a mortgage can I get out of the purchase  Please advise.  Thanks.  John. 

Hi John,

 Let’s hope you do get your loan approval but if you don’t, I hope I have good news for you.  Normally when you put a deposit down on a house you give it to an Auctioneer who is licensed and bonded and he or she will issue you with a receipt marked “Subject to Contract – Subject to Loan Approval”.  If you don’t get your mortgage then you are entitled to a full return of that deposit. 

If you have actually signed contracts there should be a clause in those contracts which makes the whole deal subject to loan approval.  Your Solicitor would have put this in to protect your interest if you instructed him or her that you were getting a mortgage.  You should check the wording of the contracts and contact your Solicitor if you don’t have copies.  If the clause is in the contacts then you are entitled to a full return of the deposit.

Incidentally, normally a contract deposit is held by the seller’s Solicitor, who is also fully bonded and insured to guarantee the safety of the money. 

 

The issues raised in the answer to this NewsTalk listener's question are dealt with in a general way as can only be the case on live radio. Before relying on the advice given in this answer, whether you heard the broadcast or are for the first time reading the issues here please do not rely on the broad advice given. For a detailed professional opinion please consult a qualified legal advisor and for further details read our disclaimer on the Home Page.

The issues raised in the answer to this NewsTalk listener's question are dealt with in a general way as can only be the case on live radio. Before relying on the advice given in this answer, whether you heard the broadcast or are for the first time reading the issues here please do not rely on the broad advice given. For a detailed professional opinion please consult a qualified legal advisor and for further details read our disclaimer on the Home Page.

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