Is my purchase contract null and void if my lender does not have my financing approved by the date on contract?
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Is my purchase contract null and void if my lender does not have my financing approved by the date on contract?
Contract states that I has until 2 days ago to obtain financing. However, due to circumstances out of my control, I didn’t have a final approval although I had been working with the lender to
clear up a small issue to finalize the funding. Also, my agent did not ask for an extension of the date.
Asked on June 2, 2016 under Real Estate Law, Ohio
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 8 years ago | Contributor
If your contrsct let you cancel the sale by a certain date in the event you did not get financing, but you did not do so and the date has passed ("2 days ago"), then, unfortunately, the contract is not null and void, is in effect, and you are obligated to it. Those "finance contingencies" or "mortgage contingencies" in home purchase contracts are not automatic; rather, they require you to affirmatively exercise them by providing notice, prior to the contingency date, that you are exercising your right to withdraw or terminate the the deal due to a failure to obtain financing. If you fail to do so by the date in the agreement, you will be locked into the contract, unless the seller agrees to voluntarily let you out. It does not matter the failure to obtain financing was due to.circumstances beyond your control: it is your responsibility to get the financing or to properly exercise the contingency in time.
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