10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED - PART 7 - WORKING WITH YOUR LENDER

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED

Part 7 – Working with your lender

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

WORKING WITH YOUR LENDER

In our previous publication we discussed why is it necessary to obtain various property certificates and how would the final purchase price be adjusted.

If you have been working proactively with your mortgage broker or your lender directly, some 1-2 weeks before the settlement date the lender will contact your conveyancer by a fax or an email message and will provide a letter which would contain an amount of funds which you borrowed from that lender and which are available for a purchase of your property.

This is the end result of your involvement in borrowing process which would enable us to instruct the lender to provide funds for settlement.

To get to that end however you hopefully worked with your mortgage broker or your lender directly in advance, read their Product Disclosure Statement (PDS), asked questions, obtain answered and hopefully received an independent financial and/or legal advice on your loan.

The lender has probably conducted a valuation of the property you are purchasing for loan to value considerations.


The lender by then has already contacted us to request some documents which are required for your loan application, such as a copy of your contract and transfer, and we provided them.

What can possibly go wrong? You need to make sure that you know well in advance how much of available funds your lender can provide to you, that is funds net of fees, charges, stamp duty on mortgage (if any) etc.

If you are short on funds, you need to have saved enough already to cover the shortfall, otherwise you may need to ask the vendor to delay the settlement and face up to 10% p.a. penalty interest daily until that date when you are in the money and ready to settle.

Conclusion: sit down with your mortgage broker and discuss how much you can borrow, what savings do you have and remember that final purchase price may be adjusted up for several hundred to several thousand dollars. Do not end up in default of the contract because you miscalculated your budget.

You can read our previous publications here.

Ross Anderson Lawyers provides residential and commercial conveyancing services. Please visit our conveyancing website for more information:

Contact Andre Petrov of Ross Anderson Lawyers to discuss your conveyancing matter today.

Mortgage Broker “In Advance Financial Management” will assist to obtain a home loan suited to your needs. Call Boris Glushankov on 0411 835 071 to get a great deal on your mortgage.

(c) All rights reserved. This and any other publications by Ross Anderson Lawyers are copyrighted. Reproduction, copying and commercial use is prohibited unless expressly authorised by Ross Anderson Lawyers.

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED - PART 6 - PROPERTY ENQUIRIES

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED

Part 6 – Property inquiries

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

PROPERTY INQUIRIES

In our previous publication we discussed obtaining finance for your purchase and pointed out the importance of working with your mortgage broker to have it ready by settlement.

As you are completing your loan application forms provided to you by your broker (or directly by lender), there is much going on behind the scenes.

Your solicitor or conveyancer orders multiple documents (also called certificates) with the purpose of determining what money is owed on the property by the vendor and to prepare a document called settlement adjustment sheet.

The document sets out the agreed price of the property, the amount you have already paid to vendor’s agent as a deposit, and then adds or deducts amounts owed by the vendor by way of council rates, strata contributions, water rates and in some cases, land tax levies.

This is done to ensure all payments are accounted for and apportioned to each party depending on where the proposed settlement date fits into various payment periods.

These certificates will cost several hundred dollars (at the time of writing of this article) and the cost of them may need to be paid by you on top of conveyancing fees quoted to you in the beginning of the matter. These costs are called disbursements and your solicitor by now would have explained and quoted them in.

Inevitably, the final price you would be required to pay for the property will change because of these adjustments. The difference between what you thought the price was and what you would be required to pay could be several hundred dollars or more.

Needless to say, you should have enough funds either saved or borrowed to finance that difference in price.

Conclusion: read the settlement adjustment sheet provided to you by your solicitor or conveyance carefully, ask for explanations and budget for more funds that you expected to pay.

Ross Anderson Lawyers provides residential and commercial conveyancing services. Please visit our website for more information.

Contact Andre Petrov of Ross Anderson Lawyers on 1300 86 16 76 or email us to discuss your conveyancing matter.

Mortgage Broker “In Advance Financial Management” will assist to obtain a home loan suited to your needs. Call Boris Glushankov on 0411 835 071 to get a great deal on your mortgage.

(c) All rights reserved. This and any other publications by Ross Anderson Lawyers are copyrighted. Reproduction, copying and commercial use is prohibited unless expressly authorised by Ross Anderson Lawyers.

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED - PART 5 - ARRANDING FINANCE

10 MISTAKES WHEN PURCHASING A PROPERTY WHICH CAN BE AVOIDED

Part 5 – Arranging Finance

Sydney-based legal practice Ross Anderson Lawyers will assist you to avoid or minimise complications which arise when purchasing real estate. We helped many of our clients to avoid multiple pitfalls in the process and now ready to share our knowledge with you.

ARRANGING FINANCE

In our previous publication we discussed cooling off period and suggested that that grace period is used to undertake due diligence checks and arrange finance.

Having said that it may not be possible to obtain a formal approval for finance within that time, even if the vendor would allow for extension of cooling-off period for a few days more.

Finance, which most of the time comes in a form of a home loan, secured on the property you are proposing to purchase, is a domain of specialists called mortgage brokers, and we simply note from our experience that lack of finance is an expensive misfortune or mistake some purchasers make (unless of course it is a “cash sale” with no money borrowed).

A contract for sale and purchase of property usually contains provisions drafted by vendor’s solicitor which require purchaser to pay penalty interest and vendor’s legal costs in the event that settlement is delayed due to lack of finance.

In some cases vendor may issue a “last warning” Notice to Complete which would provide purchaser with 14 days to settle the property.

Conclusion: obtaining finance is an important step in conveyancing transaction.
Ross Anderson Lawyers provides residential and commercial conveyancing services. Please visit our website for more information.

Contact Andre Petrov of Ross Anderson Lawyers on 1300 86 16 76 or email us to discuss your conveyancing matter.

Mortgage Broker “In Advance Financial Management”  will assist to obtain a home loan suited to your needs. Call Boris Glushankov on 0411 835 071 to get a great deal on your mortgage.

(c) All rights reserved. This and any other publications by Ross Anderson Lawyers are copyrighted. Reproduction, copying and commercial use is prohibited unless expressly authorised by Ross Anderson Lawyers.