New Home Building Deposit

Profile picture for gbrite2
I put down a $5000 deposit and signed a contract with a builder for a new home. They are still getting the permits and have not broken ground.There is a clause in the contract that states if I do not get a mortgage commitment I will get my deposit refunded. Do I just have to notify the builder I did not get aproved or do I need some documentation?
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January 23 2010 - Dover
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Profile picture for wetdawgs
Usually the other party to the contract (the builder) will want to see proof of your inability to get a loan.   I am assuming they asked for evidence of preapproval for you to get this far?
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January 23 2010
Profile picture for Bobbiejoroth
When you put in the offer did you have your own agent. They will want proof which is not hard to do. If you had your own agent he or she can take care of this for you. If not call your lender and they will provide you with what you need.  And if you put an offer on a new home make sure you have an agent working for you! When you have a agent it will not cost you anythng and he or she will keep you informed on how to protect your $$$. Good luck. Bobbie Jo Roth
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January 24 2010
Profile picture for funds2
Before you proceed any further, get pre-approved by a lender. Hard to imagine that builder would start construction based on your intent to purchase. You certainly would not want to think you are going to be the owner of a brand new home, and find out you don't qualify; and even worse that your $5,000 may not be refunded. If you have been pre approved about the only reason your loan approval would not be valid would be appraisal/value issue, or if change in your employment/income impacted your qualifying.  $5K is a lot of money so be sure you know exactly what your rights are.......
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0Yes

January 24 2010
 
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