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Should I Waive a Mortgage Contingency?

Brid Mortamais June 17, 2023

Deciding whether to waive a mortgage contingency is a significant financial decision that should be carefully considered based on your individual circumstances and risk tolerance. While I can provide some general information, it's important to consult with a real estate professional or an attorney for personalized advice.
A mortgage contingency is a clause in a real estate contract that allows the buyer to back out of the deal if they are unable to secure mortgage financing within a specified period. By waiving this contingency, you essentially commit to purchasing the property regardless of whether you can obtain a mortgage.
Here are a few factors to consider when deciding whether to waive a mortgage contingency:
  1. Financial Stability: Evaluate your financial situation and determine if you have sufficient funds to cover the purchase price of the property without relying on a mortgage. Waiving the contingency makes sense if you have the necessary cash reserves or alternative financing options.
  2. Mortgage Pre-Approval: If you have a strong pre-approval from a reliable lender and are confident in your ability to secure financing, you may be more inclined to waive the contingency. However, be aware that even with pre-approval, there's still a chance of the lender denying the loan application during the underwriting process.
  3. Seller's Market: In a highly competitive seller's market, waiving the mortgage contingency can make your offer more attractive to sellers. However, it also increases your risk, as you're obligated to complete the purchase even if your mortgage falls through.
  4. Risks and Consequences: Understand the potential risks involved. If you waive the mortgage contingency and are unable to obtain a mortgage, you could lose your earnest money deposit or be sued by the seller for specific performance.
  5. Professional Guidance: Consult with a real estate agent or attorney who can provide expert advice based on your specific situation and local market conditions.
Ultimately, the decision to waive a mortgage contingency depends on your financial circumstances, risk tolerance, and the prevailing real estate market conditions. Consider seeking professional advice to make an informed choice that aligns with your best interests.

Work With Brid

Brid is a full-time agent with a deep understanding of the local market and provides exceptional service for each of her clients whether they are renting, buying, or selling. She handles every aspect of each real estate transaction, guaranteeing her buyers and sellers the highest level of honesty, attention, and discretion.