Contracts
A New Jersey purchase contract specifies that the sale is contingent on the buyer obtaining a mortgage at a rate not to exceed 7%. If the buyer qualifies only for a loan at 7.5%, the buyer may:
ABe forced to purchase the home at the higher rate
BCancel the contract and recover their earnest money under the financing contingency✓ Correct
COnly cancel if the lender provides written denial
DWaive the contingency and proceed without a mortgage
Explanation
A financing contingency protects the buyer. If the buyer cannot obtain financing meeting the contract's specified terms (rate, amount, type), they may cancel and recover their earnest money.
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