All Topics / Finance / Loan timing for an off-the-plan purchase

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  • Profile photo of ggbehggbeh
    Participant
    @ggbeh
    Join Date: 2011
    Post Count: 3
    February 1, 2012 - 2:32 pm

    Hi All,

    In October 2011, I put down a 5% deposit on an off-the-plan apartment which is due to be completed around April/May 2012.

    I have driven past the building site on a few occassions and the construction looks like it has progressed well/should finish close to the estimated date (although this is purely a guess based on external appearance as it is my first property and I don't have any insight whatsoever).

    My question is: When should I consider engaging a broker/bank to get funding in preparation for settlement on the apartment? As it is an off-the-plan purchase, there is no exact settlement date so I would like to ensure that I am adequately prepared to avoid any penalty fees.

    Thanks in advance for your responses.

    Profile photo of Richard TaylorRichard Taylor
    Participant
    @qlds007
    Join Date: 2003
    Post Count: 12,024
    February 2, 2012 - 1:07 am

    Hi ggbeh

    Firstly welcome to the forum and I hope you enjoy your time with us.

    It is a very good question you raise and funnily enough I have a deal on my desk at the moment from a forum member in exactly the same position.

    Off the plan lending can cause problems when it comes to timing as lenders will want to undertake a final valuation once the place is complete and wont normally be able to prepare loan documentation until the Title is registered. After which time you normally have 14 – 21 days to settle.

    This coupled with the fact that a Conditional Approval normally is only valid for 60-90 days after which time information will need to be updated can often also cause issues.

    In saying all of this we Brokers deal with such matters every day of the week and so most things can be overcome.

    Personally if you believe that the property will be completed around April / May i think i would certainly be starting to liase with your Broker and start to collate documentation.

    If it is your first property and you will be claiming the FHOG then there are a few extra items of documentation you will need so in my opinion never does any harm to start planning early. 

    Cheers

    Yours in Finance

    Richard Taylor | Australia's leading private lender

    Profile photo of Jamie MooreJamie Moore
    Participant
    @jamie-m
    Join Date: 2010
    Post Count: 5,069
    February 2, 2012 - 11:30 am

    Hi ggbeh

    Welcome aboard.

    I'd put in a quick call to your solicitor/conveyancer and ask them to find out if completion is still on track for those months.

    If it is –  then best to start moving now.

    Cheers

    Jamie

    Jamie Moore | Pass Go Home Loans Pty Ltd
    http://www.passgo.com.au
    Email Me | Phone Me

    Mortgage Broker assisting clients Australia wide Email: [email protected]

    Profile photo of DerekDerek
    Member
    @derek
    Join Date: 2004
    Post Count: 3,544
    February 2, 2012 - 11:33 am
    ggbeh wrote:
    My question is: When should I consider engaging a broker/bank to get funding in preparation for settlement on the apartment? As it is an off-the-plan purchase, there is no exact settlement date so I would like to ensure that I am adequately prepared to avoid any penalty fees.

    Are you saying you put a 5% deposit on a property without first consulting with a broker/bank to determine you can afford the loan?

    Or is that just the way I am reading it?

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