A Texas buyer enters into a contract with the Third Party Financing Addendum specifying a conventional loan. The buyer receives financing approval but then decides to switch to an FHA loan, which requires a new appraisal and additional time. Under the addendum, the buyer:
Correct Answer
B) Must obtain an amendment to the contract if changing to a different loan type would affect the contract terms or timeline
Changing loan types may affect the financing terms specified in the addendum and the contract timeline. The buyer should seek an amendment to modify the financing terms and any affected deadlines. The addendum specifies the agreed-upon loan terms.
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Related Topics & Key Terms
Key Terms:
Related Concepts
Novation is the substitution of a new contract for an existing one, or the replacement of one party with a new party, with the consent of all parties involved. The original party is completely released from all obligations.
Offer and acceptance is the process by which one party proposes specific terms for a contract and the other party agrees to those exact terms, creating mutual assent. This mutual agreement, also called a meeting of the minds, is an essential element of every valid contract.
An option contract gives one party the exclusive right, but not the obligation, to purchase or lease a property at a specified price within a specified time period. The buyer pays option consideration to keep the option open.
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