perf mortgage addendum-option

Perf mortgage addendum – the specifics

Performance mortgage addendum is usually in continuation to the price and terms of purchase agreements between the seller and buyer for the property. This buyers mortgage financing plays a very significant part. As part of the purchase agreement, the contingency is in effect till the closing date and this is mentioned in the purchase agreement. In case the buyer cannot complete the financing before the closing date, then the purchase agreement stands cancelled and the buyer is refunded the earnest money. By securing finance or completing the finance means that the mortgage financing is completed.

The contingency is effective till around 3 weeks or more for the buyer to obtain a loan approval letter which is also called a loan qualifying letter or some statement from the lender stating that they are willing to loan the amount before or on the approval date of the loan.

The contingency also states that the buyer can waive off the financing contingency and the seller can cancel the purchase agreement after giving the buyer 15 days to cure and that the purchase agreement when is cancelled the buyer is refunded the earnest money.

The buyer is given the mortgage for a specified period of years with a specified rate of interest per year – this could be either fixed or adjustable.

The application of the mortage needs to be made in 5 business days of the purchase agreement being accepted. Incase there are discount points the terms and conditions need to be mentioned as well.

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Sample Template Preview

PERFORMANCE RIDER TO
MORTGAGE OR DEED OF TRUST
(attach this rider to standard mortgage or deed of trust)

Rider and addendum to Security Instrument dated ________________, 20_______

___________________________________________________ (“Optionor”), has executed a certain agreement dated ______________________ 20____________ (“Agreement”) under which Optionor is under an obligation to perform certain acts, promises and/or covenants to ___________________________________________ (“Optionee”) on or before _____________________, 20__________.

The attached Security Instrument (mortgage or deed of trust) secures to Optionee the performance of Optionor’s promises, covenants and agreements under said Agreement.  Wherever the words “grantor,” “mortgagor,” “trustor,” or “borrower” appear in the attached Security Instrument, the word “Optionor” shall be substituted therefore. Wherever the words “mortgagee,” “beneficiary” or “lender” appear in the attached Security Instrument, the word “Optionee” shall be substituted therefore.

_________________________________    ______________________________
Borrower/Optionor                Borrower/Optionor

_________________________________
Lender/Optionee

State of ___________________)
) ss:
County of _________________)

Sworn to and subscribed before me this ______ day of ____________, 20______ by the following individuals____________________________________________

____________________________
NOTARY PUBLIC
State of ______________________
Commission expires_____________
[SEAL]