Loan timing for an off-the-plan purchase

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.

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 - richard@tayloredfinancialsolutions.com.au Tel: 07 3720 1888
Residential Mortgage Broker providing structured home loan advice for investors and owner occupiers all over Australia.
Want to live of your rental income? 0-40 properties in a decade. Email me for a copy of my API Magazine interview

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

Pass Go Home Loans Pty Ltd - Australia wide Mortgage Broker
www.passgo.com.au | info@passgo.com.au | p. 1300 656 299 | PO Box 286 Woden, Canberra ACT 2606
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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?

Derek
North Perth Project coming up - est +$92K profit & rent returns ~9%+ - http://tinyurl.com/7untpjy
derek@eosproperty.com.au | www.eosproperty.com.au | 1300 558 114