Mortgage Contingencies in New York Can Protect Your Down Payment

We always have clients who ask:mortgage contingencies

“If something goes wrong during my real estate closing, how can I get my money back?”

Here’s the deal: if you’re buying a condo, there are only a few ways to get your deposit back if, in fact, something should “happen” prior to your closing.  You’re putting down a minimum of ten percent, so it’s important that you know your rights and how to get your deposit back, should something go wrong.

The mortgage contingency clause is meant to protect your downpayment.  So long as you act in good faith while applying, you have a good chance of getting your money back.  Why would you get denied if you’ve been pre-approved?  Common reasons include a job loss, taking out more credit card debt (don’t ask why someone does this while they apply for a mortgage), identity theft (yes, I’m serious) as well as financial issues with the condo or co-op that you may be purchasing in New York.

The easiest and most common way to get your money back is to ensure there is a mortgage contingency clause in your Contract.  The clause is standard in most deals (depending on whether the market is “hot” or not) and allows you to receive a full refund of your down payment, should the lender to which you apply deny your application.  How and why does that ever happen?  What are some other advantages in having this clause?  Check out my short podcast below for some answers to your questions.