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Can I back out of a refinance before closing?

Posted on: 10th Sep, 2009 03:54 pm
i am going through a divorce and my soon-to-be ex has changed his mind about how much he will sell his share of the house to me for. but the refinance is already in process; he won't sign any papers though. will i lose out on more than my 'earnest money'?

-lisa
You will probably loose the money what you have piad till. But check the terms of the agreement
Posted on: 10th Sep, 2009 08:08 pm
Hi Lisa,

You can back out of the refinance before closing. But once you close on the loan, you become liable for the loan and you cannot back out of it until you pay it off. In case you back out before closing, you may have to lose the earnest money. But depending on what type of agreement you had with them, you can get a partial or a full refund of the earnest money. If you have paid for the appraisal etc., then you are going to lose that money as well.
Posted on: 10th Sep, 2009 11:12 pm
i don't get this reference to earnest money. if it is a refinance, it is property that you already own anyway. if you back out of your refinance transaction prior to closing, you will not be compensated for any money you've paid out to the lender or others on their behalf.

on the other hand, if you go ahead and close, you will have a 3-day right of rescission. if you exercise that right, and cancel the loan during that 3 day period, it is required that your lender return all funds to you that you've paid out.

if you're going to cancel, i'd suggest you do it after closing and during your rescission period.
Posted on: 11th Sep, 2009 07:49 am
Check with the lender before going for further decesion also go through agreement carefully.

Good Luck
Posted on: 11th Sep, 2009 10:44 am
dang
Posted on: 11th Sep, 2009 11:43 am
I don't have the agreement - the loan officer has been less than helpful - so I'm not even sure how to check! By 'earnest money' I meant the $200 I had to put down with my application, though that may have been an application fee... I did already have the appraisal. Can another bank use the same appraisal, or if I don't close now, will I have to pay for another one?
Thanks for the quick reply,
Lisa
Posted on: 11th Sep, 2009 05:17 pm
Tenoirmystess

You can expect to lose your $200. After all, the broker has been working on your behalf and needs to have SOMETHING for his/her efforts. In addition, if the home was appraised already, then you would owe that cost as well.
Posted on: 12th Sep, 2009 06:45 am
can I decided to not go through with an application for refinance, but they took a deposit for an apprasier to come out. They haven't set an appointment to come out. Can I get that 300.00 back.
Posted on: 04th Aug, 2010 01:34 am
Hi william,

You can very well cancel your refinance application now but I don't think you would be able to get back the money that you paid for appraisal. If the appraisal has not taken place, then you may request the lender to give back the monies.

Take care.
Posted on: 05th Aug, 2010 02:46 am
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