Financing Commitment
The Most Important Real Estate
Contingency
This is a very important document. It is your assurance that
your lender will provide the financing for your new home. The Offer
to Purchase and the Purchase and Sales Contract should each have a
provision which protects you in the event you can not get financing,
however, these provisions or contingency clauses do have an end
date, a date by which you must get assurance of financing from your
lender.
Study the commitment letter when you receive it. It should
have very few contingencies of its own. Lenders will expect and the
document will state that their commitment is good as long as all the
conditions under which you applied for the loan are still true.
Examples of what they will require are that you remain employed and
you still have the required funds available to close. It should not
require that the house appraise at some value. The lender should
have completed the appraisal of the house beforehand. If at that
time they found the house did not appraise at the sale price or
more, they should have notified you then. Not now.
I recommend that if you have not already received your
commitment, at least a week before your financing contingency date,
contact your lender to be sure they will be able to give you their
commitment on time. If they need more time, ask them to send you an
e-mail requesting an extension and forward this to your buyer's
agent or attorney. Your agent or attorney will extend this request
to the seller's agent or attorney. Failure to do so could mean you
could lose the protection of your finance contingency clause. Copyright©
2006 - Chris Kellogg
All Rights
Reserved
Last Modified
05/16/2007 |
