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Have contract on new house, but cannot sell old house?

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ok4now

Junior Member
New York:

We entered into a contract to buy a home in 10/04. We were given a closing time of 5/16/05-06/16/05 as we had informed seller that we had to wait until we had owned home for 2 years. Seller agreed to that and we also agreed to pay seller at closing additional $4M for the time delay. It is now 6/14/05 and we have been unable to sell our home. We applied for a bridge loan to get us the money we would need to close on the new home, but when that was approved the bank told us that the orginal mortage commitment was null and void because the income/ratio to loan was too high. They have said that they will give us the mortgage only if we sell the first home.
Does the fact that our mortgage is now denied get us out of our contract to purchase the new home? What are our options? The sellers attorney does not seem to care and told us that if we do not close they will take our deposit, which is substantial ($48K). We asked if they would be willing to extend the contract, to which they told us no. Any advice would be greatly appreciated. Thanks :confused:
 


BradleyS

Member
Is there any financing/mortgage contingency clauses on the purchase contract?

Is there any contingency clauses for "Successful closing of primary residence"???

Do you have a RE Agent or Attorney working for YOU???
 

ok4now

Junior Member
Yes, we do have a contingency clause for a mortgage, not for the sale of the house. We do have an attorney working for us, but he keeps pushing a mortgage broker on us that he says will help us get the mortgage, but at a much higher rate. We want him to tell the sellers attorney that we have been denied for the mortgage, but he will not do it. We do not want to use this broker to get a mortgage at such a high rate of interest. (10%) He thinks if we try to get out of the contract on the mortgage contingency it will end us up in court and then we have the possiblity of losing all of our deposit. We spoke with our financial advisor, but he is not an attorney and said that he thought that the mortgage contingency clause would release us from the contract. If there is a contingency clause for a mortgage denial, why is our attorney acting as if it will not get us out of this contract? We are so far into this we really don't want to have to change attorneys. Any advice is greatly appreciated.
 

BradleyS

Member
Tell your attorney to get off his rump.....or you will fire him and report him to the ethics committee.

Or, I would find another lawyer....
 

JETX

Senior Member
ok4now said:
Yes, we do have a contingency clause for a mortgage, not for the sale of the house.
If you have a 'financing contingency' as you claim.... simply get a letter from your mortgage company confirming their denial of your application.... then follow the agreement as to how to notice the seller of your termination of the purchase contract.

He thinks if we try to get out of the contract on the mortgage contingency it will end us up in court and then we have the possiblity of losing all of our deposit.
Of course that is a possibility, but if you do have a contingency clause as you claim, any success of a lawsuit should be minimized.
 

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