MORTGAGE COMMITMENT AND FINANCING CONTINGENCIES

The P&S typically includes several contingencies including a mortgage contingency clause, which states that the Buyer’s ability to purchase the house or condominium is contingent upon his or her ability to obtain mortgage financing (through a “commitment letter” from the Buyer’s lender) by an agreed upon date (usually a few weeks after the signing of the P&S). If financing cannot be obtained by the appropriate date, then the Buyer must notify the Seller (usually in writing) to either cancel the transaction or extend the contingency deadline. If the Buyer fails to do so, then he or she may end up forfeiting his or her deposit to the Seller.