| A mortgage contingency clause is a provision in the | | | | seller need to get some security about the deal to |
| home purchase contract that stipulated that if the | | | | happen. The seller may be too concerned that the |
| prospective buyer can not get a mortgage within a | | | | buyer is leaving the transaction too uncertain. |
| fixed period of time, this prospective buyer will be | | | | Therefore these provisions are often negotiated. |
| able call the whole deal off. In other words, the | | | | General contingency clauses are very often to a |
| agreement is conditional on the buyer being able to | | | | contract. You can find appraisal clause stipulating that |
| obtain a mortgage on the property. | | | | the sale is conditional to a certain amount of the |
| Be careful when dealing with contingency clause. Any | | | | value of the house. House inspection clause stating |
| real estate officer or loan officer will tell you that | | | | contingencies that deal with the presence of insect |
| there is no universal "standard" mortgage contingency | | | | and other toxic substances or with the tests to |
| clause. The seller would prefer that the sale close no | | | | verify that a septic system or well is functioning |
| matter how high the interest rate and how awful the | | | | properly. You will find thousands of contingencies |
| terms the mortgage carries for the buyer. But the | | | | clause. Everything comes down to your ability to |
| buyer wants to be sure that if he cannot get the | | | | bargain and deal with the seller. But the hardest to |
| mortgage he is counting on, such as one with 90% | | | | bargain is the mortgage contingency clause on the |
| financing on a 30-year loan, the mortgage at no more | | | | ground that it affects directly your financial |
| than a specific rate, he can stop the transaction and | | | | commitment. |
| recover the down payment. Both the buyer and the | | | | |