Walking away from a lender

[Scott Caulfield]

I'm due to close on 9/25, but my lender's numbers are coming back higher than expected. I have the cash to close, but what are my expenses in walking away from the lender? What do i need to be aware of in a cash purchase?

Thank you!

[Jon K.]

@Scott Caulfield I'm curious what numbers are coming back higher. I'm assuming this is a conventional lender. Depending on the types of fees the lender charges you can sometimes negotiate them down or away completely. If you were to tell the lender you're considering walking because of the numbers, they may work with you on some of them.

That being said, if you walk away from the loan you should only be out the cost of whatever services you've already received from third parties such as an appraisal/pest inspection. Those are often paid prior to closing out of pocket by the buyer but sometimes just added to closing costs. But you shouldn't still have to pay the fees/points that would have gone to the bank.

Cash transactions are far more simple. You'd tell the title company that you're switching your payment method to cash and they'll update all the paperwork. They'd send you wiring instructions for the funds which you absolutely have to call them to verify to avoid cyberscammers from stealing from you. When you show up to close it'll be much faster, much less paperwork to sign. And you can always do a cash out refinance or establish a LOC later on if you want to tap the equity for something else.