It is standard practice to make a purchase offer contingent upon obtaining a mortgage. Because of this contingency, the seller will want the details of your financing plan to accompany your offer.
In the purchase offer will be specified the amount of down payment the buyer will apply toward the purchase. Usually a check for the earnest money will accompany the offer. This will give the seller further evidence of your qualifications and intentions to secure a mortgage.
Within the purchase offer, we will provide a safeguard against any dramatic change in interest rates between when the offer is made and when the loan is closed. The offer will not only be contingent upon qualifying for a mortgage, it will also be contingent upon the new mortgage interest rate not exceeding a certain amount.
If the house selected is at the top-end of the buyer’s budget range, the buyer may want to include a request for seller assistance in paying a portion of the closing costs traditionally paid by the buyer, or to help “buy-down” your interest rate. Other seller assistance may include having the seller “carry back” a second mortgage to cover your down payment or even 100% seller financing, called a purchase money mortgage.
With any of these seller assistance options, you can expect to pay a higher purchase price than if you had handled the financing through a traditional mortgage lender.