The Department of Veterans Affairs requires this “escape clause” as a safety margin for the VA loan applicant. The escape clause protects the buyer from being obligated to a VA mortgage loan when the appraised value of the home does not match the sales price.
Accordingly, what is the VA amendatory clause mean?
This is added to your purchase agreement, must be signed by you and your seller, and states that if the property doesn’t appraise for at least the agreed-upon sales price, you are not obligated to go through with the purchase.
One may also ask, what happens if a VA loan is foreclosed on? A: If foreclosure unavoidable, it may directly affect your VA loan entitlement. If the government suffers any loss as a result of your delinquency, the amount of entitlement that was used for the VA loan cannot be restored until the loss is paid back.
Regarding this, can you walk away from a VA home loan?
VA Mortgage Defaults Additionally, when you walk away from a VA-guaranteed mortgage, you often lose a portion of your eligibility for a future VA mortgage. You can, however, regain full VA mortgage eligibility if you make good on the government’s loss from your mortgage default.
What is a VA addendum?
VA loans feature their own unique appraisal contingency known as the VA Amendment to Contract. This key document must be signed by both buyer and seller. The Amendment to Contract contingency protects a VA buyer’s earnest money if they walk away from a deal because the appraised value came in below the purchase price.