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What an Underwriter does NOT want to see when viewing Chicagoland Real Estate Contracts
 
What an Underwriter does NOT want to see when viewing
Chicagoland Real Estate Contracts
 
      Recently, I've seen some repetitive scenarios popping-up on my mortgage clients' Sales Contracts, as they pertain to "concessions" and property repairs.  Several of the transactions I've seen have had Home Inspection issues arise.  Each time this has set-off the back-and-forth of timely negotiations.        I think it's important for clients to understand that ... from an Underwriter's viewpoint ... the ONLY allowable Seller-paid concession on a Sales Contract is for Closing Costs and certain pre-paids, such as Interest, Homeowners Insurance, and Escrow Deposits.  
     In other words, credits or escrows established and intended for "future" repairs to be made by new Buyers are not allowed WITHOUT effecting the Sales Price, Appraisal, and Loan Transaction.        Lending Guidelines state:  Contract clauses or Riders or Addendums that reference a "Repair Credit" must be treated as "Price Concessions" and are to be DEDUCTED from the Sales Price dollar for dollar.  
     To better illustrate this Lending Guideline, consider the following scenario:   
     A house sells for:  $305,000        But the Home Inspection, made after the Sales Contract has been signed, ... more

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