When purchasing a property “Off Plan”any finance assessment and approval done with your lender will expire after 3 to 6 months; which is really of little good to someone not needing the funds for say 12 or 24 months.
You will need to satisfy your finance clause and go unconditional on your contract at the front end of the process (normally 21 days from the date of contract) but chances are you will not have unconditional finance approval from your bank until the end part of the construction timeline.
The way to approach this is to ensure your broker assesses your borrowing capacity now to ensure you would qualify for the necessary finance under the current lending criteria and with consideration for your ongoing financial and family situation. As completion of the new property draws near a formal application will then be lodged with your lender to secure the funds required at settlement.
Unconditional Without Unconditional Finance.
Once the finance clause has been satisfied, your contract normally becomes unconditional. However, for the most part of the construction phase you will not have unconditional finance approval from your lender. In almost all cases this is not a problem, however, responsibility and care need to be shown in a few areas:
Changes to your financial situation.
Changes to your financial situation will change your borrowing capacity. You need to ensure that any changes you are contemplating will not disqualify your ability to secure the settlement funds required. Don’t quit a job or cut back your spouse’s hours or borrow money to renovate your home etc without first having your broker assess how such a change will impact on your ability to secure the funds required for the new purchase.
If you are currently contracted to buy an off the plan property and you have any doubts whatsoever as to how to any changes a bank’s lending rules may impact on you, I suggest you speak with your broker and have him/her reassess your borrowing capacity.
Should you require finance assistance for your next property purchase then do no hesitate to contact us and we will put you in touch with a professional mortgage broker who can source and setup a loan to suit your needs.
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