Myself and my wife have recently received confirmation that we have been conditionally approved for a maximum amount of $250k for our 1st PPOR. We have requested to borrow 100%.

After reading the loan proposal docs provided, there were a couple of special conditions included that are required to be satisfied in order to receive formal approval. One of them has me slightly confused though… so I just thought I would get your feedback.

The special condition says  'A copy of the completed contract of sale (in your full names) for the property you purchase'.

So would this mean that I would be required to provide a signed copy of the contract of sale for formal approval to take place? Ideally I dont want to sign anything until after inspections and valuation is done and then receive the formal approval before signing the contract. Or could this just be for when I need the valuation done so they need the paperwork to identify which property it is for etc..?

Thanks

My Understanding is that the lender will not give a formal approval until the conditional approval reverts with confirmation of satisfactory valuation. If you are concerned about signing contracts then perhaps to stipulate in the contract that it is subject to satisfactory inspection and valuation reports as well as of course finance approval, this way you have an out if one of these doesn't stack up, and gives the agent a signature to present contract to the vendor. This also is a step towards taking the house of the market.

Alternatively, you should be able to get finance organised with certain lenders, approved to the amount required on both deposit (equity or cash backed) and of course serviceability.

This will be the key, if servicing the loan is easy in the lenders eyes, they will be more inclined to approve, where servicing is tight, they will want more detail. Naturally if they know there is a property you have in mind they will want to see the contract.

Hope this helps