A Contingency in a real estate contract usually means that something needs to happen in order for something else to happen.
Example - “This contract of sale is contingent upon the purchaser receiving loan approval.” This means that loan approval must happen for the sale to happen (or close).
A financing contingency should be included in your offer if you are relying on a mortgage lender (a loan) to buy the property. Included in the statement about financing is the type of loan you are seeking, whether it is FHA or conventional, how much you are financing with this loan and the interest rate. If you can not get the loan and terms you have on your offer, you would have the option of getting out of the contract without penalty.
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