As a seller can I cancel a contract if I am denied a mortgage to purchase a new house

Asked almost 2 years ago - Toms River, NJ

I am selling a home and buying a home. I was denied a mortgage for the purchase, do I have the right to cancel the sale of my home since I am not able to move into a new home

Attorney answers (5)

  1. John B. D'Alessandro

    Contributor Level 14

    3

    Lawyers agree

    Answered . It depends upon the language contained in the Contract on the sale of your house. I hope you retained an attorney during attorney review, but seeing that you live in the southern part of the State of NJ you may not have. It is customary to add a provision in such deals that in the event that you were unable to purchase a new home that either the contract would be canceled or you would get more time. However if the contract is silent on this issue you may be forced to proceed with the sale irrespective of the fact that you may not have anywhere to live after closing. You should consult with an attorney quickly to review your options.

    IMPORTANT LEGAL NOTICE: The response to the question posted is not legal advice and it does not create an attorney-... more
  2. Jeff Tomberg

    Contributor Level 14

    3

    Lawyers agree

    Answered . you will need to consult a lawyer to review the contract for your purchase. if the contract has a mortgage contingency you may be able to cancel the purchase. without the contract to review its not possible to answer. there may be limitations or conditions that you may have to meet in order to cancel. seek the advice of a lawyer.

    without a detailed review by a lawyer can all the issues raised in your question be appropriately addressed...... more
  3. Michael T Millar

    Pro

    Contributor Level 19

    1

    Lawyer agrees

    Answered . It depends on what your Contract of Sale states.

    A "purchase of home contingency" is much less common that a "sale of home contingency". It is not something that is typically found in a NJ RealtorĀ® form contract.

    Typically, the right to cancel a sale contingent upon an ability to buy another property is a clause that is negotiated by your attorney and added to the Contract of Sale.

    This answer is for general education purposes only. It neither creates an attorney-client relationship nor... more
  4. Christina Margaret Costanzo

    Contributor Level 5

    1

    Lawyer agrees

    Answered . I agree with the other responses that say, unfortunately, it depends. Hopefully you had a contingency for the purchase built into your sales contract. Perhaps you have sufficient cash to make the purchase, even without the mortgage. If you are not already working with an attorney, you should seek counsel.

    This post was prepared for informational purposes only and is neither intended nor shall it be interpreted to be... more
  5. Robert Joseph Keltos

    Contributor Level 7

    Answered . I agree with the other attorneys in that the answer to your question depends on whether there was a mortgage contingency clause in the contract for sale of your home. If you are working with a realtor, you should speak with them, as well as an attorney, regarding the contract language. You can also speak with your realtor about whether you have any other options to obtain a mortgage.

    This information should not be taken as legal advice, and this information is not intended to create an attorney-... more

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