Mortgage Contingency Clause

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We're writing up a contract to buy a home with a close date roughly in October. When should we set the mortgage contingency clause for? It's our understanding that it's typically set for 30-45 days from contract signing, but that leaves a lot of time until October. Our attorney has mentioned similar concerns. He advised reaching out to mortgage lenders to see what options might be available. We appreciate any guidance that you can provide. Thanks.

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Wow... I have never heard of a sale that far in the future.

You would probably need a 100+ day mortgage contingency. What if we hit another bump in the road and housing prices go down, what if lending is tightened even further, what if interest rates jump up?

Making an offer that far out doesn't seem to make much sense.

tennis8363 said:   You would probably need a 100+ day mortgage contingency. What if we hit another bump in the road and housing prices go down, what if lending is tightened even further, what if interest rates jump up?

Making an offer that far out doesn't seem to make much sense.


Probably a new construction purchase?

Okay... set the date as normal. You get pre-approved/approved, no appraisal, no rate lock. You wait till closing and apply wherever you'd like. You just no longer can void the contract because you can't get financing, period.

so i had something similar recently .. i started in early March and closing in late May ... although not quiet as long. YOu need to worry about only your stuff - from buyer perspective. You should propose what you like, and let the seller attorney adjust/propose to you.

Put in you need to be approved for mortgage by end of September, and perhaps put a month when you want to do inspection (if you do it too early, they may damage something later on).

JaxFL said:   Okay... set the date as normal. You get pre-approved/approved, no appraisal, no rate lock. You wait till closing and apply wherever you'd like. You just no longer can void the contract because you can't get financing, period.

he is the buyer .. so he needs to protect himself, and put it in a way so he/she can backout - as starter, and work way down from that after seller attorney adjust.

Of course, you want to protect yourself, and void the contract if you can't get financing. A loan commitment can't be obtained this early - closing date is too far off. I think OP should say loan commitment needed say 3 weeks before close, or if he/she can't get it, then they can back out of contract.

If that's the case, as a seller, I'd expect them to continue to market the home, 48hr first right of refusal, as there is no assurance that there would be a closing. Unless seller is a fool, who would wait without any assurance. Op needs to protect himself, but also wants seller to sell op the property.



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