Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Not sure if this is the forum for my questions. Please let me know which forum should I move to if it is not...
The house we are interested in is a new build (we are a fist time buyer). All the outside wall/roof are completed. The builder will not start working on internal until there is a buyer. The builder had a very good reputation on that town. He built one or two houses each year and people like his houses.
On the Purchase and Sales Agreement (P&S) the closing date for the house that we are interested is July 30th. But the seller asked for a commitment letter from lender on April 1st. And once we submit the commitment letter to seller, we do not have Mortgage Contingency anymore (per the P&S). Since there are 4 months between the submission of commitment letter and the actual closing, we are very uncomfortable with the early commitment letter date. We asked our lender, the lender said that in the commitment letter there is a clause that will protect our deposit. It states on commitment that our income needs to be verified 10 days prior to closing. But that did not convince us as in the P&S we have to satisfy commitment letter's condition otherwise we will lose our deposit (which is 5% of the whole price, and we offered the full price).
If we get the commitment letter (meaning the lender pre-approved our loan application), what if the condition changes between April and July? Let's say (God forbidden) one of us lose his/her job in that period, I do not think the lender will still honor the commitment letter and approve our loan. Mostly the lender will void the commitment letter and we are rejected the load application. I do not think our Job will be in jeopardy, just wanted to see what the risk is - by submit an early commitment to remove the mortgage contingency and then get rejected when actual closing - we lose our deposit money.
Also, does the actual loan has to be the same as the commitment letter - for example, the load applied by both of us, certain amount of down payment, length of the load. In the case of one of use lose his/her job, when we are closing - can we change the length of the loan to a longer period (25 years to 30 years), put more down payment and apply the loan by the one who is still employed?
We really liked the houses (the one is building), we also tour a one he sold last year. (The owner kind enough to let us visit the house). But this mortgage contingency thing is bothering us very much.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
