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\n <\/div>\n \n Find a Top Buyer\u2019s Agent to Guide You<\/h3>\n
HomeLight can connect you with a top-rated real estate agent familiar with mortgage contingencies and home listings in your area. The most experienced agents know how to safeguard your earnest money and time.<\/p>\n \n
What is a mortgage contingency in a purchase offer?<\/h2>\n
A mortgage contingency<\/a> in a purchase offer is a pivotal clause for both buyers and sellers in a real estate transaction. It gives you, the buyer, a set period to secure a mortgage loan. If you’re unable to obtain financing within this timeframe, the contingency allows you to back out of the deal without losing your earnest money<\/a>.<\/p>\n This contingency is particularly important if your ability to purchase the home hinges on getting a mortgage<\/a>. It’s a layer of protection that ensures you’re not legally bound to buy a property if your financing falls through.<\/p>\n The specific terms, like the duration and conditions of the mortgage contingency, are negotiable and vary depending on the agreement between the buyer and seller. The contingent period usually lasts between 30 to 60 days<\/a> from the date you signed the purchase agreement.<\/p>\n A mortgage contingency works as a safety net in your home purchase agreement. Here’s a short example to illustrate its function:<\/p>\n You obtain your financing:<\/strong> Imagine you’re buying a home and have included a mortgage contingency in your purchase offer. This contingency states that you must secure a mortgage approval<\/a> by a certain date \u2014 let’s say 45 days from the date of the agreement. During these 45 days, you’ll apply for and work toward obtaining a mortgage loan<\/a>. If you receive mortgage approval within this period, the deal proceeds as planned.<\/p>\n Your financing falls through:<\/strong> If you’re unable to secure a mortgage within these 45 days, the contingency comes into play. You can opt to request an extension from the seller, renegotiate the terms, or back out of the purchase<\/a> without penalty. This means you won’t lose your earnest money deposit, which is a significant amount<\/a> put down when the offer is made.<\/p>\n As a buyer, you can request an extension to the mortgage contingency deadline, but the seller is under no obligation to grant you the additional time.<\/p>\n","protected":false},"excerpt":{"rendered":" In this guide, we break down the mortgage contingency date vs. the closing date, and how contingencies can impact your journey to homeownership.<\/p>\n","protected":false},"author":298,"featured_media":40191,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"cybocfi_hide_featured_image":"","footnotes":""},"categories":[192,629,632],"tags":[],"class_list":["post-40190","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-for-buyers","category-home-financing","category-mortgage-loans"],"acf":[],"yoast_head":"\nHow does a mortgage contingency work?<\/h2>\n