From a sellers point of view, "non-refundable deposit" is pretty clear. It's not the sellers fault the buyer was not able to get financing. $5000 is a pretty big deposit. Normally earnest money on a home purchase is only one or two thousand. If the seller is a nice guy he might refund some portion of that but I don't think he is obliged to do so. As for the $5000 sent to the loan company, it seems like the loan company should refund that since they are the one that cancelled the deal. If your state has a Consumer Protection agency, usually associated the the State Attorney General's office, you might file a complaint with them. Also check to see if loan companies are regulated by the State and file a complaint with that agency. It might be worth a few hundred bucks to get some advice from an attorney to find out exactly where you stand but small claims may be the only option.