Interest Rate Limits On The Contract Need To Reflect The Current Rate Environment
Buyer agrees to accept the interest rate as may be committed by the mortgage lender not to exceed a maximum interest rate of XX%
Congratulations seller, you have a contract that has a mortgage contingency clause included, and interest rates has just gone up 1/2 point. Do you know the buyer can terminate the contract if the interest rate quoted by the lender exceeds the maximum rate set forth in the contract?
In the past few weeks rapidly rising interest rates pose some potential stumbling blocks to a successful closing. Listing agents need to be aware of current mortgage rates and their potential upward or downward movements. The maximum rate that is acceptable to the buyer needs to reflect current rates, with some reasonable allowance for upward movement.
A contract today with a ceiling of 3.75%, and rates hovering around 4.5%, could present an easy way out for a buyer looking to get terminate their contract.
Wallingford PA Real Estate – Wallingford, PA 19086
