What happens if I cancel a mortgage contract if I am unable to make the payments and cancel before I have signed the bank loan papers? The sellers have my promise money and I am going to pay for the appraisel. What legal rights do the sellers have to make me take out a loan? It has bee about one week since they accepted by offer.

I think you mean a SALES contract, in which you agree to purchase the home. You pay a deposit towards the purchase price (the promise money?). That deposit is forfeit if you back out of the sale. Normally, you have a 3 day grace period, but that seems to have past.

You need to read the terms of the sales contract, but they can't force you to go through the process of obtaining a mortgage and closing.

A mortgage contract is the loan contract between you and the lender.

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Originally Posted by zzsherry

What happens if I cancel a mortgage contract if I am unable to make the payments and cancel before I have signed the bank loan papers? The sellers have my promise money and I am going to pay for the appraisel. What legal rights do the sellers have to make me go ahead and take out a loan? It has bee about one week since they accepted by offer.

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I agree... as a lender I have never had a borrower legally obligated to borrow from me. While it might dissapoint the loan officer, you are under no obligation to do anyhing but meet the terms of the sales contract... namely provide the agreed-upon consideration to the seller by the agreed-upon date. The source of the consideration can not be forced upon you in any jurisdiction I am aware of.

Ron Schwartz - SunTrust Mortgage - Greater Washington DC Region