Asked and AnsweredOne of the conditions in my loan commitment states that the monthly maintenance cannot increase by more than five percent? Is that a problem?
It could be. Even when all the due diligence is conducted before the contract is signed, a future maintenance increase may not yet have been determined. If a contract is signed in October, but the closing does not take place until January, it’s very possible that a maintenance increase will not be discussed by the Board until the November or December Board meeting. When you show up at the closing in January, if there has been a significant increase in maintenance, your bank could raise an objection at the closing table that could cause the closing to be adjourned…or worse…the bank withdraws it’s underwriting. It is essential that all “conditions” stated on a loan commitment be reviewed with both your mortgage broker and attorney very carefully, to insure that you are able to satisfy the bank’s ever increasing number of hoops that a borrower has to jump through to get a file released for closing.