The issue of changes in financial status can play a significant role and have a striking impact on a closing, especially when a Buyer is using financing for their purchase. The most important thing for the Buyer to know is that they must disclose any changed financial situation to their lender prior to or at closing. In most instances the lender will need to re-evaluate the Buyer’s financial situation to determine if they still qualify for the loan in question. If there was a significant change in financial status then it is likely that they will not qualify for the loan to close on the property.

In the event that the lender does indicate that the Buyer no longer qualifies for the financing then it is imperative that the lender provide a denial letter in writing to be used in an attempt to receive the Buyer’s deposit back. Depending on the specifics of a particular situation, it may not be possible for the Buyer to receive their deposit monies back, especially if the Buyer withheld information from the parties and the lender. On the other hand, if the Buyer is up front and direct with all parties there is a much better argument for the return of the Buyer’s deposit in situations where the lender’s funding conditions cannot be met for closing.

Remember, communication is always key, but especially when there is a bump in the road as a delay in disclosure will almost always result in headaches for all parties and potential loss of time and money.