A housing loan contract is a legally binding between the lender and the borrower to identify the purpose of loan, important procedures and rights of both borrowers and the lenders. Lenders and real estate brokers write the housing loan contract during the sale process of the property. The terms and conditions of the contract can be modified according to the policies of the business and by mutual consent of all parties. It is important to strictly adhere to the guidelines of writing a housing loan contract to avoid future conflicts and troubles. A well written housing loan contract enables you to get desired benefits and you will get a security against lots of troubles.
Tips to Write Housing Loan Contract
A housing loan contract is an important document, therefore it is important to consider all legal requirements while writing and following are some tips that will help you to write a perfect housing loan contract:
Choose Appropriate Heading
Commence your housing loan contract with an appropriate title such as “Housing Loan Contract” and write the current date with it. Write the name of the parties who are involved in the contract, such as write first, middle and last names of borrower and first middle and last name of the lender. Write the status of parties like who is the lender and who is the borrower.
Define Important Terms
Draft article 1 and section lists of all defined terms used in the housing loan contract. You have to specify the real estate terms and explain the meaning of terminology, including Access Laws, Allocated Loan Amount, Associates, Deposit and Default Rates. These terms are important to explain in the housing loan contract and write the definition of each term in alphabetical order.
Representation of Borrower
Write details of article 2 and in this article, you have to represent the borrower, warranties and covenants. This section is important for borrowers as it detailed the rights of the borrower and important warranties. You can include the existence of ownership, financial information, conditions of the property, physical condition of the house, survey, security interests and bankruptcy details.
General Conditions of Loan
This section should detail the nature of the document, type of the title policy, insurance information and inspection for the lender. You can use subheadings to highlight important parts of the housing loan contract.
Agreement to Lend
It is important to identify all parties that are involved in the housing loan contract. Explain the use of loan, rules and regulations and any important process of the loan. It is important to include all casualties, censure and insurance reporting clauses in the agreement.
Here is a sample Housing Loan Contract Template created using MS Word,
Common Mistakes in Housing Loan Contract
- Do not forget to write about transfers, waivers and notice polices, because the absence of these points may cause difficulties for all parties.
- Always provide a copy of the housing loan contract to all parties and get their signature on it too. Signatures are important for to get the written consent of all parties to the terms and conditions.
- It is important to carefully read the housing loan contract before signing it to avoid potential threats.
Here is download link for this Housing Loan Contract Template,