Home Buying in Needham>Question Details

Realty Green…, Home Buyer in Needham Heights, MA

Mortgage / financial contingency

Asked by Realty Greenhorn, Needham Heights, MA Thu Feb 21, 2013

I understand as a buyer I can pull out of a sale during the 'mortgage / financial contingency' part of the sale if I can't 'get' a mortgage. Will I get my EMD/purchase deposit back if I can get a mortgage not because I couldn't get a mortgage but because I couldn't get the mortgage @ the rate that would work for me (ie., during pre-approval I was told that I would qualify for a rate of 4.5-5% but when I shopped around for the loan because of changes in my financial situation or otherwise caused the average rate that I would get to be 6-6.5%. The new rate wouldn't be affordable for me).

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Heath Coker’s answer

Ask your attorney if your contingencies protect you.
The words/terms of the contingency may have included some interest rate clauses.
You may also need to apply to another lender.

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1 vote Thank Flag Link Mon Feb 25, 2013
This is an attorney question. Are you in a jumbo range or have an oddball situation. 6% should not even be offered.
0 votes Thank Flag Link Fri Feb 22, 2013
Hi..I recommend you consult with your attorney if you have one. With that being said, our mortgage contingency says
"the buyer shall apply for a conventional bank or other institutional mortgage loan of $_______ at prevailing rates, terms and conditions. If despite the buyer's diligent efforts a commitment for a loan cannot be obtained before _____, then the buyer shall have the options of revoking this agreement by written notice tot the seller and.or the broker representing the seller prior to the expiration of such time, whereupon all deposits made by the buyer shall be forthwith refunded, and this agreement shall become null and void without further recourse to either party."
If the bank is saying you do not qualify at the higher rate..then they would give you a letter of denial which you can forward. If it is you that doesnt like the higher rate but you still qualify...you need to consult with your attorney. The "prevailing rates" is what is open for discussion as I see it. I assume you have already signed the Purchase and Sale agreement and are not just at the offer contract.
I hope this helps.

Lynne Hagopian
0 votes Thank Flag Link Fri Feb 22, 2013
And yes..I agree..read your individual contract to see how it is written...and then consult with an attorney.
Flag Fri Feb 22, 2013
In the state of MA there's not a standard contract that everyone uses across the board. Also, the P&Spa your attorney draws up is even less standardized. Always refer to your contract. It spells out your rights and responsibilities. Anyone who gives you advice without having read your contract is doing you a serious disservice.
0 votes Thank Flag Link Fri Feb 22, 2013
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