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Finance for home buyers

By Louise MacCallaugh - 14 Sep 2010 - 1 comment

"I've got finance pre-approved, so I don't need a finance condition right?"...Wrong!

If you are starting out on the often stressful journey to buy a home one of the first stops you're likely to make is your bank to work out how much you can borrow.  At this stage the bank will often look just at your income and give you an approximate home loan figure.  

Once you've found the house you want to buy you might think that finance is in the bag and you don't need to worry about adding a finance condition to your agreement for sale and purchase.  This is risky.  The type of property you buy can ultimately effect whether or not the bank gives you finance.  

For example, apartments don't provide the same level of security as a stand alone house on a bit of land.  If you're looking to spend $400,000 and you think you can borrow say, 80% of that value, be careful.  The bank might actually only lend you 70%.

So, unless you have the cash in the bank, always include a finance condition in your agreement for sale and purchase.


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Excellent advice !!

Alice Capplemanreply

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