Will the seller return my deposit if the bank rejects my mortgage?

Only if you have included a specific financing contingency clause (condición suspensiva) in the arras contract. Without it, you legally lose the deposit.

What documents do I need to prove my mortgage was denied?

You will usually need to present official rejection letters (FEIN rejection or denial letters) issued by at least two major banks.

Contrato de arras: What if the bank denies your mortgage?

Failing to secure a mortgage is the most common reason buyers lose their arras deposit. Protecting your savings with a contingency clause is vital.

General information. Not legal advice.

1. The risk of signing without a financing clause

If you sign an arras contract without a financing contingency and your mortgage is denied, you will be in breach of contract. You will lose 100% of your deposit.

2. The financing contingency clause (Condición Suspensiva)

To protect your deposit, you must include a financing contingency. This clause states that if banks deny your mortgage, the contract becomes null and void, and the seller must return your deposit.

3. Requirements for the clause to be effective

The clause must be precisely written: state the exact mortgage amount requested, the deadline for banks to respond (e.g., 30 days), and require you to present denial letters from at least two banks.

Frequently asked questions

Does your contract protect you if your mortgage fails?

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