Financing Contingency
A financing contingency makes a Florida real estate purchase conditional on the buyer obtaining mortgage financing on specified terms. It protects the buyer's earnest money if financing cannot be obtained.
Key Elements
- Loan type: Conventional, FHA, VA, or other
- Loan amount and interest rate cap
- Commitment deadline: Date by which the buyer must obtain a loan commitment
- Cancellation rights: Buyer can cancel and receive earnest money refund if denied
Pre-Approval vs. Loan Commitment
- Pre-approval: Preliminary lender assessment; not binding
- Loan commitment: Formal binding agreement to lend, subject to final conditions
- Contingency deadline: Refers to the commitment, not the pre-approval
Waiving the Contingency
Buyers may waive the financing contingency to strengthen their offer in competitive markets. This is risky because the buyer could lose their earnest money if financing falls through. Only recommended when the buyer has alternative funding resources.
Related Terms
- Contract — The agreement containing the contingency
- Earnest Money — Protected by the contingency
- Closing — Where financing is finalized
Barnes Walker Title Services
Barnes Walker Title manages financing contingency deadlines and coordinates with lenders to ensure smooth Florida closings. Submit a title inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC