Contracts
A NH buyer's offer is made 'contingent upon the buyer obtaining satisfactory financing within 21 days.' The seller accepts. On day 20, the buyer receives a loan approval with a rate they find too high. The buyer may:
ANot exercise the contingency as they received a loan approval
BExercise the financing contingency to terminate the contract if the loan terms are not satisfactory based on the contingency language✓ Correct
CAutomatically receive a 30-day extension
DForce the lender to lower the rate
Explanation
If the financing contingency is written to require 'satisfactory financing,' the buyer has some subjectivity in determining whether the terms meet this standard. A significantly higher rate than anticipated may allow the buyer to terminate under this contingency. However, if the contingency specifies objective criteria (e.g., rate not to exceed X%), the analysis is more clear-cut.
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