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Nov 10, 2022 · The VA loan provides eligible borrowers with an outstanding home buying option with borrower protections. One clause that protects borrowers is the VA escape clause, which allows VA borrowers to walk away from a property if the appraisal comes back lower than anticipated.
The VA Loan Escape Clause acts as a safety net for buyers using a VA loan. Essentially, it stipulates that if the contract purchase price or cost exceeds the reasonable value of the property established by the VA, the buyer is not obligated to go through with the purchase.
Mar 29, 2024 · The VA escape, or amendatory, clause ensures that if the reason for breaking the contract is a low appraisal value, the buyer will get the earnest money back. It is a required attachment to any VA loan agreement if earnest money is put down before the home is appraised.
Jul 30, 2019 · The Escape Clause must be contained in the sales contract for all VA- guaranteed loans. The lender is responsible for ensuring that the paragraph is in the sales contract prior to closing. In the event the clause is not in the sales contract, VA may not guaranty the loan.
Oct 12, 2022 · Be sure the sales contract includes the “VA escape clause” or “VA option clause.” This provides an option to void the contract if the property doesn’t appraise for the contract price. Ask your real estate agent for advice on other options for voiding the contract you may want to include, such as if the property fails a home inspection.
Jun 1, 2017 · In basic terms, this escape clause, also known as the VA amendatory clause, allows a VA buyer to remove themselves from the loan contract if it turns out that the home they’re buying is appraised at a lower value than what the seller is selling it at.
Apr 9, 2024 · Definition: The VA loan escape clause (also known as the Amendatory Clause) is a safety net built into VA home loan contracts. It protects borrowers when the house’s appraised value comes in lower than the purchase price. This means that if the VA appraisal determines that the house isn’t worth what you agreed to pay for it, you have some options.
