Hi Dawn, thanks as always for great info. I gather from what you have said that it may be prudent that, if the buyer offers more than the list price, Seller/Agent asks for a letter from lender asking what their maximum borrowing power might be. Am I on the right track here.
Hi Lou, the “maximum” a lender will give in a transaction is directly connected to the value of the property, and not just the borrower’s ability to make a certain payment every month. So when you’re looking at the contingency for property approval, it’s really about the loan-to-value ratio that lender requires. So what you’d really need to know what is the maximum percentage of appraised value that lender will loan, and that would be the maximum borrowing power of Buyer with regard to the property approval contingency.
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