Can Earnest money be returned? See scenario below.?

Looking to buy a condo for my mother in law, I put down $2,500 as earnest money.

- The clause from Pulte Homes had a 15 days period for returning the earnest money in case we decided otherwise.
- In order to receive their incentive package we needed to sign with Pulte Mortgage.
- In order to expedite the process and because I have a 743 credit score I went through with the loan application as the borrower.
- Later found out that I couldn't be a borrower in the loan because I was living a few miles away from the condo and could be interpreted as an investment.
- After that, my mother-in-law was set as the borrower. She's retired, live in a property overseas, has no debts (none) and collect alimony from her ex-husband.
- The interest rate offered to my mom-in-law was 7.375% for a 30yr fixed loan with PMI and with a discount point fee.

At that point Pulte didn't offer further assistance. Consequently, she didn't want to proceed with the closing.

You need to take that up with Pulte Homes. If your 15 day period has expired, good luck.

if the 15 day period isn't over they should return it...regardless they need to return you deposit because they didnt sell you the property...the whole "well we need to make a profit" thing on their part doesn't wash...not by a long shot...they're not in the business of getting money handed to them for no goods or services in return...no one is..(although one would think people are in todays unscrupulous social enviroment)...in any event if they don't return your deposit hire an attorney...

Sounds to me that your original actions in giving the earnest deposit were premised on certain actions by not just you but the seller and that established the meeting of the minds. It now sounds that all the circumstances have changed and there is no original meeting of the minds that can be used to proceed with the transaction.
My opinion is that they should simply give you back the earnest deposit unless they want to show up on the legal advance sheets.
Buena Suerte

There is usually a clause in the earnest money agreement that it is dependent on your actually being able to obtain the loan.

Ask the Realtor representing you how to proceed.

You should see a real estate attorney about that. It all depends on how the contract was written. The rate offered for you mother-in-law doesn't look that bad for her situation. But I do understand you were looking for something better.

If your condo is worth less than the new Pulte Home, then there is a very good chance of considering your new home a primary residence, not an investment property. In the end, it is up to the underwriter to determine how the property is classified, but in my experience, as long as you are upgrading, it should be fine.

Email me with any questions: peter@chicagobancorp.com. I do financing all over the country, and would be more than happy to help you if you still want that home.

Not knowing all of the specific details, here is an idea.

Tell your mortgage company that you DO want to buy the property as an investment. This will cause your interest to be higher.

Once purchased, allow your mother to live there. Let her pay rent in the amount of the mortgage (if that was your original intent).

Based on what you have written, that should keep the underwriter happy.