Contracts
A buyer submits an offer with the financing contingency: 'This contract is contingent on the buyer obtaining a 30-year conventional mortgage at no more than 7% interest for 80% of the purchase price.' If the buyer qualifies for a 7.25% rate, the buyer may:
ABe forced to accept the loan since they qualified for financing
BTerminate the contract and receive their earnest money back because the contingency was not met✓ Correct
CMust accept a different loan type to satisfy the contingency
DWaive the contingency if the seller agrees
Explanation
The financing contingency sets specific conditions. If the buyer cannot obtain financing meeting those exact terms (7% or less in this case), the contingency is not met and the buyer may terminate the contract and recover their earnest money.
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