Mortgage financing clauses
Named lender, amount, deadlines, buyer obligations, and deposit risk.
The financing-condition clause (住宅ローン特約) lets you cancel and recover the deposit if specified financing fails — but only if it names the lender and amount, sets clear deadlines, and you meet your obligation to apply in good faith.
Key points
- The clause should name the lender, the amount, and the application and approval deadlines.
- It governs whether you recover the deposit if financing fails.
- You must meet your obligations — applying in good faith and by the deadline.
- A poorly drafted clause can leave your deposit at risk.
What the clause does
The financing-condition clause (住宅ローン特約) is the mortgage buyer’s core protection. It allows you to cancel the contract and recover the deposit if specified financing fails under the clause. To work, it should name the lender, the amount, and the application and approval deadlines, and it should state clearly what happens to the deposit if the loan is declined. Confirm the lender, amount, application deadline, approval deadline, and refund terms before you rely on it.
Your obligations and the deposit risk
The clause protects you only if you meet your obligations — chiefly applying for the named loan in good faith and by the deadline, and not causing the failure yourself (for example, by taking on new debt or changing jobs). If the clause does not apply to how the financing actually failed, or you missed a deadline, the deposit can be at risk. Because the wording is decisive, do not sign a sale contract before you understand the clause, and have it reviewed if the transaction is large or unusual.
Key points to carry away: The clause should name the lender, the amount, and the application and approval deadlines; It governs whether you recover the deposit if financing fails; You must meet your obligations — applying in good faith and by the deadline; A poorly drafted clause can leave your deposit at risk. Use the linked guides and calculators for the full decision, and confirm anything material with the lender, a licensed broker, a judicial scrivener, or a tax accountant before you act.
Who this is for
- Mortgage buyers drafting the clause
- Anyone protecting a deposit
What this is not
- Cash buyers
- Taking on new debt or changing jobs can cause the loan to fail in a way the clause does not cover, risking the deposit.
Frequently asked questions
What is a financing-condition clause?
A contract term governing cancellation and deposit return if specified financing fails.
Is the deposit always returned if the loan fails?
Only if the contract’s financing-condition clause applies and its requirements were met.
Should I change jobs after preapproval?
Avoid material changes until closing unless disclosed and accepted; a change can undo an approval.