Short answerYour purchase agreement's financing contingency usually decides it. If you gave proper notice within the contingency deadlines, you can typically cancel and recover your earnest money. Options to save the deal include another lender or loan type, a larger down payment, a seller concession, or more time. Read your deadlines carefully.
Common reasons loans fail late
- New debt or a job change.
- Low appraisal.
- Repairs required by an FHA, VA, or USDA appraiser that nobody will pay for.
- Undocumented funds.
Options
- Try another lender or program.
- Renegotiate price after a low appraisal.
- Agree to an extension in writing.
- Cancel under the financing contingency with proper written notice.
See earnest money in Indiana and low appraisal options.
Frequently asked questions
Do I lose my earnest money if my loan is denied?
Not if you are protected by the financing contingency and follow its notice terms. Read your contract.
Can the seller back out if my loan is late?
The contract terms control. Get extensions in writing.
Keep reading
Looking at a house and not sure what you are getting into?
Ask for a free Before You Offer review. Send me the listing. I look over the photos, the seller's disclosure, and recent sales, then flag likely condition issues and planning cost ranges before you write an offer.
Request a Before You Offer reviewOr call or text (812) 525-5489, or email john@yourpropertynegotiator.com.
The Before You Offer review is a REALTOR® and contractor review of the listing, not a home inspection. It is for buyers who are not already working with an agent. If you have an agent, please bring these questions to your agent.
Written by John Long, REALTOR®, 1 Percent Lists Indiana Real Estate. Working contractor who has priced hundreds of home inspection repair requests. Former labor relations negotiator for a major manufacturer and U.S. Coast Guard veteran.
John Long, REALTOR® · 1 Percent Lists Indiana Real Estate · (812) 525-5489 · yourpropertynegotiator.com
This page is general information, not a substitute for a professional home inspection, and not legal, tax, insurance, or lending advice. Ask a real estate attorney about contracts and disclosure, a CPA about taxes, your lender about loan rules, and a licensed inspector or tradesperson about your house. Nothing here guarantees a sale price, net proceeds, repair cost, payment, timeline, appraisal, inspection result, or loan approval. Cost figures are planning estimates, not bids. I own Wardmark Property Operations LLC, a contracting company. You are always free to use any contractor you choose.