Backing out of a Purchase & Sale Agreement on new home?

jasmine :)

New member
We signed a purchase and sale agreement with a local builder in Ontario for a home that they started building in August 2009. Not we are approaching closing which will be at the end of this month and we still don't have a loan secured.

We have been going from bank to bank, and have dealt with two mortgage brokers and we are still approved for nothing because of being self-employed, and having a really low credit score. We have already payed $20,000 to the builder in 4 instalments during the year.

We are still looking for a mortgage and are now working with a third mortgage broker, but if we don get approved for a mortgage before closing, can we back out without getting sued? Will we lose the $20,000? What will happen exactly and what can we do?
 
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