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What happens if my loan is not approved by the deadline in the contract?
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Under these circumstances you have three choices. We can ask the seller for an extension of the loan commitment deadline. At this stage in the game the seller will have a substantial time invested in entertaining your offer. It is unlikely that he will jeopardize that for a few days delay. Actually the closing date might not have to be moved at all. It is a different story if the seller wants out of the contract with you. His only chance then to deny the extension.
If the seller denies the request for extension of the loan commitment deadline your choice is to either terminate the contract or to let the loan commitment deadline pass. Terminating the contract obviously is not what you want otherwise you you would not have waited until the end of the loan commitment deadline. The alternative is to go past the loan commitment deadline. That is not so critical if the inspection deadline is at a later date. Then you can still try to get the financing and terminate if you are unsuccessful to secure financing by the inspection objection deadline.
If on the other-hand the loan commitment deadline coincides with the other contingency deadlines and the contract were to go hard after the passage of these deadlines you are faced with a difficult situation. If you do not terminated the contract your earnest money is at risk, if you terminate the contract you will not be able to buy the property.
All situations are different and one has to look at each individual case once the scenario unfolds. In any case as a buyer’s agent I will be able to assist you with my best advise and will be able to explain different outcomes and strategies to get to your target..... buying that special property! |
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