Mortgage Contingency Clause

A mortgage contingency clause is a provision in a real estate contract that allows the buyer to cancel or negotiate the deal if they are unable to secure financing from a lender within a specified period. This protects the buyer from being legally obligated to purchase the property if they cannot obtain a mortgage loan, ensuring they are not financially committed before confirming loan approval. Typically, it outlines a timeline and conditions for securing financing, and if the buyer cannot secure a loan by the deadline, they can withdraw without penalty, often getting their earnest money refunded.