Help Please! In Contract for primary residence

[Naveen Kolagatla]

Hi,

I am currently in contract with a new development builder in Bay area, CA. My loan got rejected after 21days financial contingency period. To be exact on 22nd day. The reason my loan delayed (generally it takes 7 days in our case it took 18 days) is due to Covid-19/refinance issues for lender and the reason my loan denied is due to change in lending terms for Jumbo Loan they requested 20% down and 15 months of reserve (Lender Estimate is for 15% down and 6 months reserve). I contacted my real estate agent he insisted to look for another loan as he feels I will jeopardize my earnest money. Both the real estate agent and Builder sales person is insisting on applying for another loan, but I am requesting them to extend the financial contingency so I can feel safe. Currently builder in extended the closing date without increasing the financial contingency period or adding the new Covid-19 addendum. Any advice is really appreciated.

- Naveen

[Steve Smithy]

You didn't have official financial commitment from the lender by the 21 days so they would have to refund your deposit, so don't worry about that.  They will try to weasel-words it into sounding like you somehow would lose it but stick to your guns here.

Don't do any deal you aren't comfortable with.  The market is crazy now and they would be crazy to let a buyer go with everything going on.  In this market I wouldn't be surprised if everything got extended 30 days.  I've had normal deals during normal times with slow lenders that just take 60 days to close "just because".