Contracts
A purchase agreement that contains a financing contingency protects the buyer by:
AGuaranteeing the seller will carry the mortgage
BAllowing the buyer to cancel and recover earnest money if they cannot obtain financing on specified terms✓ Correct
CPreventing the seller from accepting other offers
DFixing the interest rate for the buyer's mortgage
Explanation
A financing contingency allows the buyer to cancel the purchase agreement and recover their earnest money if they cannot obtain a mortgage loan on the terms specified in the contingency (e.g., a 30-year fixed loan at no more than a specified interest rate and amount). It protects buyers from losing their earnest money if financing falls through.
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