FILTERS:

Check the mortgage clause

22 July 2004

Because of the confusion of the mortgage clause in some Offers to Purchase or Agreements of Sale, home buyers and sellers must be sure when they sign that they are not committing themselves to the transaction under unacceptable conditions.

As different agencies use their own sale documents, the clause - stipulating that the transaction is subject to a home loan being granted - can be worded in different ways and might contain provisions unforeseen by the buyer. Such as those stating that a home loan will be regarded as having been granted even if the approval is only provisional.

It may also bind the buyer to the agreement even if the loan approval includes conditions that are unacceptable to him - such as the provision of additional security or the procurement of additional life assurance. No buyer or seller should ever sign a sales agreement in which this clause has been left blank otherwise he could be committed to the sale even if he does not secure a loan.

Chas Everitt Property Signpost

Submit your comment:
 
Name
EMail
Comments
Security Picture (click to change)
Word shown in picture: