240 Third Street, Macon, Georgia 31201
478-749-1700 478-749-1700

Lender Requirements

Appraisal

        • Generally your contract should be subject to and conditioned upon the property appraising for no less than the purchase price. If the property appraises for less than the purchase price, the conditional contract fails for that reason.
        • The newly formatted purchase and sale contracts contain an appraisal contingency, but give the buyer the right to request the seller to reduce the purchase price to that of the appraisal if the appraisal is less than the purchase price. If the seller refuses, then the deal is off. The back and forth between the buyer and the seller in the event of an appraisal less than the purchase price is controlled by the various notices set forth in the formatted contract itself.

Escrow Account

        • Most lenders on conventional FHA and VA loans require that the borrower establish an escrow account out of which property taxes, homeowners insurance and mortgage insurance are paid. An escrow account is a separate account which the lender administers on behalf of the borrower to collect and pay for taxes and insurance, and if so required, private mortgage insurance. The purpose of the escrow account is for the lender to assure itself that the taxes and insurance of the property are paid. The escrow account is usually set up at closing.

Private Mortgage Insurance

        • All lenders require borrowers to pay a premium for private mortgage insurance if the borrower’s down payment is less than twenty percent of the purchase price of the property. The purpose of this policy is to ensure the lender that it will not suffer any loss in the event that the borrower defaults on the mortgage loan and the lender is required to foreclose on the property. The closing documentation will usually include forms in which the borrower acknowledges that the lender will maintain the private mortgage insurance on the loan and that the borrower will pay the premium for this insurance on a monthly basis, and that there will be no refund of any unused portion of the premium at the time the loan is paid off.

Closing Documentation

          • It is recommended that you call your lender a day before the closing is scheduled in order to ensure you have all documentation you will need at the closing.

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