Finance Formally Approved, or Contract now unconditional – what is next?

12/27/2018
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We usually send our clients ALL the required ‘wet-ink’ paperwork with our initial postal package. Sometimes we need to allow for the other party to complete certain forms first, so thanks for your patience and understanding if you receive more than one form requiring ‘wet-ink’ execution.

Buyers;
That Loan Amount on the Unconditional/Formal approval is usually NOT the exact amount your lender will make Available as Funds (aka funds your lender will bring) for Settlement.
The Lender will usually take their fees and costs out of that approved Loan Amount this effectively reduces the Available Funds at settlement. Which may mean that the Buyer might have a ‘Client contribution’, or ‘Funds to complete’, or sometimes misnamed as additional ‘Deposit’ (Deposit as defined under your contract is to be held by the Deposit Stakeholder).

So if there is a ‘Client Contribution’, then best become aware of the expected difference on the required balance you will need Contribute towards settlement.

We often are not advised of the exact amount the lender will bring to Settlement, till much closer to settlement -often not till morning of settleemnt. However your broker/banker who setup the loan would have the best idea of that amount, and will have usually calculated to some best efforts the amount you will need to contribute.  So the next query;

  • ACCESS to any contribution? – Ask your Lender if they are able to access your contribution, to bring ALL the required funds to settlement? if they say NO then we may need to have those funds deposited and cleared (usually 3 business days) in our Trust account, before Settlement is able to be completed.

With regard to your contribution usually it is best if you authorise your lender to access your account or perhaps by a pre-payment on your new loan, So they can bring ALL the funds to settlement.

However some lenders / circumstances will not cater for that, in which case our trust account for your contribution is the only other way, these deposits normally take the banks upto three (3) business days to clear those funds. There is a quicker process referred to as Real Time Gross Settlement (RTGS) which allows for funds to be cleared usually by same or at least next business day- if beating for the transferring bank cut-off.

Attend to conditions especially before any expire. ie Termite or Building Inspections, due diligence clause, etc.. and confirm with both the Real Estate Agent and also A1 Conveyancing,  once done.

Sellers; Make Sure that your Discharge Authority has been completed and A1 Conveyancing have been sent a copy.

Complete and obligations under your contract and confirm with both the Real Estate Agent and also A1 Conveyancing,  once done.

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