Credit score is a very important metric for virtually all of us, and particularly within the realm of mortgage loans and mortgage refinancing. A common question we receive down these lines from current mortgage owners considering a refinance of their home loan: Can doing so negatively impact their credit score?

At Integrity First Lending, we're happy to assist with numerous forms of mortgage refinancing, including conventional, FHA and even VA loan refinancing for clients throughout Utah. The simple answer to the question above: Yes, refinancing can hurt your credit score in some cases -- but in many situations, this harm will be negligible at worst, and the related benefits you receive from refinancing will be well-worth this drop in credit score (which, by the way, is usually temporary and can easily be recovered from). Here are some basics on the ways your credit score may drop during refinancing, but why these aren't necessarily major areas of concern.

refinancing mortgage hurt credit score

Credit Checks

During most refinancing processes, your credit score may drop a few points due to the fact that your credit report will show multiple inquiries from lenders. While this doesn't necessarily mean you're going through with all of these potential loans, it can still ding your score a bit. The good news is that after about two years, these credit inquiries will no longer impact your score.

Average Age of Accounts

Another potential issue that can arise during refinancing is that your average age of accounts may drop. For example, if you had a mortgage for 10 years and then refinance, the average age of all your accounts combined would decrease from 10 years to five years. This could lower your credit score a few points as well, but again, this harm is usually just temporary.

Applying for a New Loan

One more issue that could drop your credit score during refinancing is if you're taking out a brand new loan as part of the process. If this is the case, it's possible your credit utilization ratio could increase. This occurs when you have more debt than before, which could drop your score a few points.

The best way to avoid any significant drop in credit score when refinancing is to do everything you can to keep your credit utilization low. You can do this by paying off as much of your old mortgage as possible before taking out a new one. Additionally, if you have any other debts, try to pay these off as much as possible before refinancing.

If you have any other questions about how refinancing may impact your credit score or want to learn more about our various mortgage refinance options, please contact Integrity First Lending today. We'll be happy to assist you further!

There are a few components of any homebuying situation that are relatively well-known, and one of these is the down payment. Referring to the amount of money that the homebuyer is putting toward the purchase price of their home in a lump sum at the closing of their purchase, down payments will typically be the largest chunk of money you pay during your homebuying process -- and when it's possible, paying a larger down payment holds multiple benefits.

At Integrity First Lending, we're here to assist a wide range of homebuyers throughout Utah with all their needs, offering tools ranging from real-time mortgage interest rates to expert assistance with all our loan programs and more. We've helped hundreds of clients navigate the down payment process, and we'll do the same for you. While paying a sizable down payment isn't necessarily possible for all borrowers and homebuyers, there are definitely some key areas of value to those who can manage it. Here's a primer.

benefits larger down payment

What Qualifies as a Large Down Payment?

There's really no set answer to this question, as what some might consider a "large" down payment could be different for others. It's all relative to the purchase price of the home, your personal finances and other factors specific to your situation.

In general, most lenders will allow you to put down as little as 3% on a conventional loan if you're a first-time homebuyer -- though keep in mind that you'll likely need to pay Mortgage Insurance Premiums (MIP) if your down payment is less than 20%. With an FHA loan, the minimum required down payment is 3.5% of the purchase price, while VA and USDA loans boast 100% financing with no money needed at closing.

For some, the threshold for a "large" down payment would be the traditional 20% down of the home's purchase price that allows you to avoid paying MIP on a conventional loan. But for others, anything 10% or above could be considered substantial.

Our next several sections will look at why it pays to make your down payment as large as realistically possible.

Lower Principal Balance

First and foremost, one of the more well-known benefits of making a larger down payment is that it immediately reduces the loan amount you'll need to finance. So, if you're taking out a $250,000 mortgage and making a 20% down payment of $50,000, your loan balance will be $200,000. But if you can manage a 30% down payment of $75,000, your loan balance will drop to $175,000.

This is important for a few reasons. Obviously, the lower your loan balance, the less interest you'll ultimately accrue over the life of your mortgage. But in addition, having a lower principal balance can also help you build home equity more quickly.

Home equity is the portion of your home's value that you actually own, as opposed to what you owe on your mortgage. So, if your home is currently valued at $250,000 and your loan balance is $200,000, your equity would be $50,000. But if you can reduce that loan balance to $175,000 through a larger down payment, your equity immediately jumps to $75,000.

This is important because as you build equity in your home, you'll have the opportunity to tap into it later through a home equity loan or home equity line of credit (HELOC). This can be extremely helpful if you need to make a large purchase or fund a home improvement project in the future.

Avoid Private Mortgage Insurance

As we briefly touched on before, another key benefit of making a large down payment is that it can help you avoid paying private mortgage insurance (PMI). Most conventional loans require that borrowers pay PMI if their down payment is less than 20% of the home's purchase price.

But what is PMI? Simply put, it's insurance that protects the lender in case you default on your mortgage. And while this might not seem like a huge deal at first, keep in mind that PMI can add a significant amount to your monthly mortgage payment.

For example, let's say you're taking out a $200,000 mortgage with a 10% down payment of $20,000. Based on current PMI rates, you can expect to pay approximately $167 per month in PMI premiums. But if you can increase your down payment to 20%, you'll no longer be required to pay PMI -- which can save you hundreds of dollars each year.

Of course, this is just one example and your actual PMI costs will vary based on a number of factors, including your loan type, credit score and down payment amount. But the point remains that a larger down payment can help you avoid this added expense altogether.

Lower Interest Rates -- And Total Interest Paid

While it's not always the case, borrowers who make larger down payments on their home also tend to qualify for lower interest rates. This is because lenders see these buyers as less of a risk, and are therefore more likely to offer them more favorable terms.

Of course, the interest rate you're offered will also depend on factors like your credit score, employment history and overall financial stability. But if you're able to make a larger down payment, it's definitely worth considering whether or not this could help you qualify for a lower interest rate on your mortgage.

And as you might expect, the lower your interest rate, the less interest you'll ultimately pay over the life of your loan. For example, let's say you're taking out a $250,000 mortgage with a 4% interest rate and making monthly payments over 30 years. In this case, your total interest paid would be approximately $186,511.

But if you can qualify for a slightly lower interest rate of 3.5%, your total interest paid over the life of the loan would drop to $167,765. That might not seem like a huge difference at first, but over the course of 30 years, it can add up to substantial savings.

For more on the major benefits of a large down payment among homebuyers who can manage it, or to learn about any of our mortgage rates, home loan programs or other services, speak to our team at Integrity First Lending today.

One of the single most exciting points in any homebuying journey, at least for most buyers, comes when they receive word that a seller has accepted their home offer. This is a major moment in the process, one that moves you from the searching phase to the buying phase quickly -- and while you should do a little brief celebrating, you should also be prepared to move forward quickly and amicably when this happens.

At Integrity First Lending, we've worked with numerous clients toward this goal and the ultimate dream of homeownership, from first-time homebuyers to many others on the market. What are some of our top recommendations for how to proceed after your offer has been accepted on a home? Here's a basic layout.

after homebuying offer accepted

Home Inspection

When your offer is accepted, you'll enter into a period where you're able to have a professional home inspector come in and look at the property. This is an important step, even if the home appears to be in pristine condition, as inspectors can often spot issues that the average person would miss. The inspection report can also be used as leverage during negotiations if there are any items of concern.

Collect Proper Documents

There are a number of documents that may be required as you move forward with the homebuying process. These can include everything from employment verification to proof of funds for your mortgage down payment. Be sure to ask your lender what will be required so that you can have everything in order before moving ahead.

If you're self-employed, the documents required may be more in-depth, so it's important to plan ahead.

Be Cognizant of Calls and Emails

The few days and weeks after having your offer accepted will likely be busy, and you need to be prepared for this. Emails and calls from people like your lender, your realtor, and the sellers' agent will be coming in regularly, and it's important that you're responsive to avoid any delays in the process.

Always Stay Amicable With the Seller

While on rare occasions the seller may accept your offer without a single counter or change, the far more common scenario is that there will be some back-and-forth before an agreement is reached. It's important to remember that the seller is likely going through their own emotional experience as they move forward, so even if negotiations get heated, try to remain calm and amicable.

Get in Touch With Us Today

At Integrity First Lending, we have a team of loan officers who are passionate about helping people achieve their homeownership dreams. If you're getting ready to move forward with an offer on a home, or if you have any questions about the process, we're here to help. Contact us today to get started.

You'll often hear homeownership referred to as a form of investment, and one of the positive sides of this theme is the common ability for homeowners who have built up equity in their home to tap into said equity for their own purposes. What are some of the reasons you might consider doing this, and how can it be done?

At Integrity First Lending, we're happy to assist clients with a wide range of mortgage loan and homeownership needs for Utah clients, including many forms of mortgage refinancing -- such as the cash-out refinance, one of the options we'll be going over during this blog. Here's a primer on the various reasons why some homeowners will look to tap into their home equity, plus some of the ways that you can go about doing so if you're looking to go down this road.

tapping into home equity

What is Home Equity and How is it Built?

First and foremost, for those who are new to the topic, let's briefly touch on what home equity is and how it is built. Home equity refers to the portion of your home that you own outright -- i.e., the difference between your home's current appraised value and the outstanding balance on your mortgage loan. As you make mortgage payments and/or your home appreciates in value, your home equity will grow.

Since home equity is often used as collateral for second mortgages and home equity loans, it's important to know that if you default on your mortgage loan, your lender may attempt to recoup their losses by foreclosing on your home. As such, it's generally advisable to only tap into your home equity when you're confident that you can keep up with your mortgage payments, even if unforeseen circumstances arise.

Reasons to Tap Into Your Home Equity

Now that we've established what home equity is, let's take a look at some of the reasons why homeowners will tap into this portion of their investment. Some common reasons include:

How to Tap Into Your Home Equity

Now that we've gone over some of the reasons why you might want to tap into your home equity, let's take a look at your practical options for doing so:

As you can see, there are a number of ways that homeowners can tap into their home equity. If you're considering doing so, be sure to speak with a mortgage loan officer to discuss your options.

Calculating Your Equity

How can you tell if you have enough equity in your home to qualify for a home equity loan or HELOC? There are a few different ways to calculate your home equity, but the most common method is to take your outstanding mortgage balance and subtract it from your home's current market value.

For example, let's say you own a home that's currently worth $200,000 and you have an outstanding mortgage balance of $100,000. This means you have $100,000 in home equity.

If you're interested in taking out a home equity loan or HELOC, most lenders will require that you have at least 20% equity in your home. So in the example above, you would need to have at least $40,000 in home equity to qualify.

Keep in mind that your home's market value can fluctuate over time, so it's important to stay up-to-date on your home's value if you're thinking of tapping into your equity. You can do this by speaking with a real estate agent or using an online home value estimator.

For more on home equity and how to tap into it, or for help with any of our home loan programs throughout Utah, speak to the team at Integrity First Lending today.

There are a few suggestions you may receive from your mortgage lender, realtor or other advisors during the homebuying process, and several of these will be in the financial realm. One that you may already be aware of, as it's common advice for new homebuyers: It's best to avoid making any major, life-altering purchases during your mortgage application and approval phase.

At Integrity First Lending, we'll walk you through every important step of the process for any mortgage you're considering, whether it's an FHA loan, conventional loan, investment property loan or any other type you might be looking into. Why is it often advisable to avoid major purchases during your loan application and closing periods, and what are the ranges of time you should typically steer clear of here? Let's look over all the important elements at play here.

reasons avoid purchases mortgage application

Why Major Purchases Are a Risk

As anyone who has been through a home purchase can tell you, this process involves lenders viewing themes like your credit score, employment history and debts to determine whether you're a good candidate for a loan. If everything lines up here, you'll be approved for a mortgage and can start shopping for a new home within your budget.

If you make any major purchases during this period that affect your debt-to-income ratio - which is the percentage of your monthly gross income that goes towards covering debts - you could unintentionally jeopardize your loan approval. These kinds of purchases can come in many forms beyond simply buying a new car or taking out a loan for a boat, too; examples might include using a credit card to finance expensive furniture or appliances for your new home, co-signing on another person's loan, or taking out a new line of credit.

In short, any kind of purchase that would put you in additional debt would be viewed as a red flag by your lender and could result in your loan being denied. If you absolutely must make one of these kinds of purchases during the homebuying process, the best thing to do is wait until after you've closed on your home loan.

When to Avoid Making Purchases

Ideally, you should avoid making any major purchases - or opening any new lines of credit - for at least six months before applying for a mortgage. This will give time for the dust to settle on your credit report, so to speak, and make it easier for your lender to get an accurate picture of your financial health.

If you already have a mortgage and are considering refinancing, you should avoid making any major purchases or opening new lines of credit for at least three months before applying for a refinance loan.

At Integrity First Lending, we understand that the homebuying process can be complex, and we'll be with you every step of the way. Contact us today to learn more about our services and how we can help you secure the best possible mortgage for your needs.

One term you've likely heard a number of times in the mortgage world, but may not totally understand how to take advantage of, is equity in a home. Equity is the difference between what you owe on the mortgage and the value of your home on the market, and high equity allows you to do a number of things -- one of which is the home equity line of credit, or HELOC.

At Integrity First Lending, we're here to help with a wide variety of mortgage services, from several origination programs to mortgage refinancing and much more. We'll inform you of all the important factors surrounding home equity, including when it might be a good time to consider a HELOC for your needs. What exactly is a HELOC, how can you find out if you're eligible for one, and when might be some good times to consider utilizing one? Here's a basic primer.

home equity lines credit

What is a Home Equity Line of Credit (HELOC)?

First and foremost, let's define what a HELOC actually is. A HELOC is a loan that's secured by your home equity, which as we stated before is the value of your home minus any outstanding mortgage debt. You can generally borrow up to around 80% of your home's value through a HELOC if you qualify, though this number may differ depending on the lender.

HELOCs act a lot like credit cards in that you're approved for a maximum loan amount, but you're not required to use all of it at once (or at all, for that matter). You can borrow funds as needed and make minimum monthly payments on the outstanding balance, or pay off the HELOC entirely without any penalty.

HELOCs also generally have variable interest rates, meaning that the rate can go up or down over time in response to changes in the market. However, some HELOCs offer a fixed-rate option for a certain period of time (typically 5-10 years), after which the interest rate will revert back to being variable.

Benefits of HELOCs

Now that we know what a HELOC is, let's look at some of the key benefits:

Eligibility for a HELOC

Now, you must be aware that there are some qualification guidelines for HELOCs, and not everyone necessarily meets them. They include:

How HELOCs Are Often Utilized

Here are some of the most common ways homeowners tend to utilize HELOCs:

HELOCs can be a great financial tool for eligible homeowners, providing them with access to cash when they need it and offering a number of potential benefits. If you think a HELOC might be right for you, be sure to speak with your lender about qualification requirements and compare offers before moving forward. They will explain the underwriting guidelines and help you select the best option.

As you can see, a HELOC can provide you with a lot of flexibility in how you choose to use the funds. But before you apply, make sure you understand the qualification requirements and compare offers from multiple lenders to ensure you're getting the best deal possible.

For more on this, or to learn about any of our home loans or mortgage rates, speak to the team at Integrity First Lending.

There are a few processes that are typically carried out during a home sale, but may be waived in certain situations depending on the needs of both buyers and sellers. A good example here is the home appraisal, or third party valuation of the home -- this is almost always part of the home purchase process, but there may be some unique situations where the appraisal is actually waived.

At Integrity First Lending, we're happy to assist with a wide variety of mortgage loan and related services, including those for first-time homebuyers who haven't been through this process before. What is an appraisal waiver, why might it be considered, and what are the risks involved here? Let's take a look.

home appraisal waiver considerations

Appraisal Waiver Basics

As the name indicates, an appraisal waiver is simply an agreement between buyer and seller to forgo the appraiser's valuation of the home. In cases where the sale price is already agreed upon, and both parties are confident in that number, this can save time and money.

The appraisal process itself can take a week or more, and costs around $400-$500 -- so it's not a small expense, especially if you're also paying for other inspections and repairs as part of the home buying process. In cases where everyone is confident in the sale price, an appraisal waiver can streamline things considerably.

Appraisal Waiver Eligibility

It's important to note that not all buyers, sellers and even properties are qualified for appraisal waivers. Borrowers, for instance, must have strong credit scores and a solid history of making on-time payments in order to qualify. Additionally, the property must be a single-family home that isn't considered "high risk" -- so things like investment properties or vacation homes may not qualify.

And finally, there are some loan types that simply don't allow for appraisal waivers no matter what. For instance, FHA loans almost always require an appraisal, as do loans involving certain types of down payment assistance.

Risks Of Appraisal Waivers

While appraisal waivers can save time and money in the right situation, it's important to be aware of the risks involved as well. In some cases, properties may sell for far less than anticipated, leaving the buyer on the hook for any difference between the agreed-upon price and the actual appraised value.

Additionally, there's always the possibility that a property has hidden damage or other issues that an appraisal would have uncovered -- but without one, these risks are simply unknown. For this reason, it's almost always recommended that buyers get some form of home inspection even if an appraisal is waived.

Whether or not an appraisal waiver makes sense for your situation depends on a number of factors, but our team at Integrity First Lending can help you weigh the pros and cons and make the best decision for your needs. Contact us today to learn more!

There are a few terms you never want to be hearing in the mortgage or any other loan world, and one of these is "predatory." A predatory lender is an individual or entity that are out to pull the wool over your eyes and make a quick buck by taking advantage of unsuspecting borrowers, and it's vital to steer clear of them for any loan you're taking out, especially a large mortgage.

At Integrity First Lending, not only are we here to help our Salt Lake City clients secure mortgages and find quality homes in reputable ways, including offering real-time mortgage rates and numerous other services, we're here to help protect our clients from risks like these. What are some of the red flags that a lender you're dealing with might be predatory in nature, and why should you steer clear of them? Here's a basic primer.

signs predatory mortgage lenders

Pushy or Rushing

First and foremost, the process of securing a mortgage is a lengthy and detailed one that requires a lot of paperwork, number crunching, and other elements. Any lender who is pushing you to take out a loan before you're ready or who seems to be rushing you through the process without taking the time to explain things in detail is likely not operating with your best interests at heart.

This is especially true if the lender seems more interested in having you sign on the dotted line than they are in answering your questions or addressing your concerns. A good, reputable lender will want to make sure you understand everything that's going on and will be happy to take the time to do so.

No Credit Check Required

Are you being offered a loan with no credit check required? That's a huge red flag right there. While there are some government-backed loans that don't require a credit check, most private lenders will definitely want to pull your credit report and score to get an idea of your financial history and repayment habits before they'll approve you for a loan.

If a lender is offering you a loan without even looking at your credit, that's a huge sign that they're not operating above-board.

Blank Fields in Paperwork

Another telltale sign of a predatory lender is if they ask you to sign blank fields in paperwork or leave sections of paperwork blank for them to fill in later. This is incredibly risky, as it gives the lender free rein to put whatever terms or numbers they want into those spaces, and you could end up with a loan that's not at all what you thought it was going to be.

Never sign blank paperwork, and always make sure that everything is filled in before you sign on the dotted line.

High Fees and Interest Rates

If a lender is quoting you extremely high fees and interest rates, that's another sign that something might be off. It's important to do your homework on current market rates to get an idea of what's reasonable, so you can tell if the lender is trying to charge you way more than they should.

Some fees and rates might be negotiable, but if a lender seems unwilling to budge on their numbers, that could be another sign that they're not looking out for your best interests.

Instructions to Misrepresent Yourself

In other cases, a predatory lender might explicitly instruct you to misrepresent yourself on your application in order to qualify for the loan. This could involve lying about your income, employment status, or other factors, and it's obviously not something you want to do. Not only is it dishonest, but it's also illegal, and if you're caught, you could face serious penalties.

A reputable lender will never ask you to lie on your application, so if you're being instructed to do so, that's a definite sign that you need to walk away.

Deceptive Presentation

In other cases, a predatory lender might try to present themselves in a way that's deceptive or misleading. They might use a name or logo that's similar to that of a well-known, reputable company, or they might give you the impression that they're associated with the government or another organization when they're not.

They might also claim to be able to help you with a loan when they're not actually licensed to do so. Do your research on any lender you're considering working with to make sure they are who they say they are, and watch out for any red flags that might indicate otherwise.

Asking for Bank Account Access

If a lender asks for your bank account information or access to your account, that's another sign that they might not be on the up-and-up. A reputable lender will never ask for access to your bank account, and if they do, it's a good idea to steer clear.

Hidden Terms or Fees

Have you ever read the fine print on a contract only to find all sorts of hidden terms and fees that you weren't aware of? If so, you know how frustrating it can be, and you definitely don't want to sign anything without knowing all the details.

When you're taking out a loan, make sure to read all the paperwork carefully, and don't be afraid to ask questions if there's anything you don't understand. A good lender will be happy to explain the terms and conditions of your loan, and they shouldn't try to hide any fees or charges.

For more on how to spot predatory mortgage lenders and avoid them, or to learn about our quality mortgage loan services in SLC and nearby parts of Utah, speak to the team at Integrity First Lending today.

There are a number of elements that homebuyers will be thinking about during this process, including some important financial themes for purchasing and owning a home. One of these that must be considered, and which it pays to know, is your home's property tax.

When you work with the pros at Integrity First Lending, we'll keep you abreast of all the important financial considerations for your mortgage and homebuying needs. We offer both original mortgages and mortgage refinancing services to clients throughout Utah, and we'll be happy to walk you through some of the most important long-term costs that come with homeownership, including property taxes. Why is it important to be aware of your property taxes for any home you own? Here's a basic primer.

why know property tax

Escrow and Earnest Money

In many homebuying situations, the buyer pays an "earnest money deposit" at the time of purchase and then puts the rest into an escrow account (that is, a holding account) until some crucial point during negotiation or financing. One of these points is the transfer of title when you close on your home, which can be especially significant if escrow is used to pay part or all of the down payment.

In some cases, earnest money you're putting down will be calculated based in part on local property taxes. That's because local property taxes are one of the major periodic expenses you'll need to plan for as a homeowner.

Similarly, part of your monthly mortgage payment may actually be escrowed away in order to pay these taxes when they come due (usually once or twice per year). Therefore, if you're not aware of how much your local property taxes are, you may end up either overestimating the amount of your escrow or underestimating it. Either way, the result could be suboptimal for your overall financial health.

New Assessments, New Value

Property tax is based on the assessed value of the property in question. This assessed value may be done by a professional assessor working for the municipality, county, or state in which the property is located. In some cases, the assessment is done on a regular basis (such as every year), while in others it's done only sporadically (such as every five to 10 years).

The important thing for homeowners to know is that a new assessment may mean a new tax burden. So, if you're not aware of how property taxes are assessed in your municipality or county, you could be caught off guard by a sudden and significant increase.

Role of Location

Finally, it's important to realize that your home's location has a major impact on property tax, particularly within the realm of what's known as the "mill rate" or "mill levy." This is the percentage of value that your home is taxed on -- 4% is a common rate in many areas, but it can vary significantly.

For example, a municipality with a very low mill rate may have higher absolute property taxes than another municipality with a higher mill rate. However, the first municipality's residents will pay less of their home's value in taxes overall. So, if you're considering a move to a different municipality or county, it pays to know what the mill rate is in that area and how it compares to other locations.

If you have any questions about property taxes or any other financial aspects of mortgages or homeownership, don't hesitate to reach out to the team at Integrity First Lending.

There are a few things first-time homebuyers will have to learn about as they enter the mortgage and homebuying market, and one of these that becomes important once you find a home you want to buy is the realm of contingencies. Referring to various conditions found in the contract you sign with the seller of a home when purchasing it, contingencies are important for a wide range of reasons -- but there are also certain cases where some of them may be waived for varying purposes.

At Integrity First Lending, we're happy to provide a host of mortgage and homebuying services to a variety of clients, including first-time homebuyers who are entering the market. What are certain contingencies that are sometimes waived, why is this done, and what should you be considering before you go ahead with this sort of thing in a real estate contract? Here are some simple themes to consider.

waiving contingencies homebuying process

Inspection Contingency

One of the most well-known and common contingencies in any homebuying contract is what's known as an inspection contingency. This refers to the condition that the home being purchased must pass a professional home inspection before the deal can move forward -- and if it doesn't, the buyer typically has the right to back out without penalty.

Why waive the inspection contingency? In some cases, buyers may be interested in waiving this particular contingency (at the request of the seller) because they're interested in making a quicker deal. If you're buying a home that's already been inspected and you're confident in its condition, it may make sense to waive this contingency. However, you should only do so if you're completely comfortable with the property -- remember, once you waive this contingency, you're effectively forfeiting your right to back out if something is wrong with the home.

If you have significant concerns about the condition of the property, it's typically best not to waive this contingency.

Financing Contingency

Another common contingency in a homebuying contract is the financing contingency, which refers to the buyer's ability to obtain financing for the purchase price of the home. This is important because, if a buyer cannot obtain the necessary financing, they will not be able to purchase the home -- meaning that the deal could fall through, and the seller would be free to sell to someone else.

As with the inspection contingency, buyers may be interested in waiving the financing contingency for the sake of making a quicker deal. However, this is generally not recommended unless you're absolutely certain that you can obtain the necessary financing. The last thing you want is to waive this contingency, put down a deposit, and then find out that you can't actually get a loan -- at which point, you would lose your deposit and would not be able to purchase the home.

Appraisal Contingency

The appraisal contingency is similar to the inspection contingency, but with a key difference: While inspections are carried out by inspectors hired by the buyer specifically to look for any issues with the home, appraisals are conducted by professional appraisers who work for lending institutions. The purpose of an appraisal is to determine the value of the home being purchased, and this value is used by lenders to help them determine how much they're willing to lend.

First and foremost, we should be clear: There are many situations where waiving the appraisal contingency simply is not possible. Some lenders will not lend money on a home unless there is an appraisal contingency in place, as they feel that this protects them from lending more money than the value of the property.

However, there are some situations where waiving the appraisal contingency may be possible -- but it's important to keep in mind that this could come with some risks. If you waive the appraisal contingency, you are effectively agreeing to purchase the home for the price that is agreed upon in the contract, even if the appraised value of the home comes in lower than that price. If this happens, you'll have to make up the difference in cash, and the difference will often be in the five-figures.

This means that, if you're not confident in the value of the property, it's generally not a good idea to waive the appraisal contingency. However, if you're confident that the property is worth the price you're paying, waiving this contingency could help to move the deal along more quickly.

Due diligence is key when it comes to waiving any sort of contingency in your homebuying contract -- so make sure you understand what you're agreeing to before moving forward.

Title Contingency

Title contingencies are relatively uncommon, but they may be included in some homebuying contracts nonetheless. Essentially, a title contingency protects the buyer by giving them the option to back out of the deal if there are any issues with the title of the property.

Issues with the title of a property can arise for a number of reasons, but they typically boil down to two main possibilities: Either there is a problem with the chain of title, or there are outstanding liens on the property.

In either situation, it rarely makes sense for either the buyer or seller to waive the title contingency -- as, if there are any issues with the title, it could result in serious problems down the road. For example, if there are outstanding liens on the property, the buyer may be responsible for paying them off -- and, if the chain of title is not clear, the buyer may not actually end up owning the property they're paying for.

For more on the various contingencies in the homebuying process and what to think about if you're considering waving any of them, or to learn about our mortgage rates or quality home loan services, speak to the team at Integrity First Lending today.

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