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Love is a Losing Game: The Importance of Finance Clauses

Love is a Losing Game: The Importance of Finance Clauses

August 20, 2018

So you made an offer, it was accepted, you got the loan and now you have the keys and are finally able to eat dinner in your own home (albeit on the floor out of takeaway boxes as you are still in the boxes and removals stage).


Whether you are new to the market or have owned property in the past- did you listen to your finance broker? Did you heed their advice or just take it as a guideline?


Some people bid with their hearts rather than their heads. This can put them in a dilemma where they can’t afford the purchase but are legally obliged to do so.


Having a finance clause in your contract means you can back out without penalties if your finance approval doesn’t come through.


In today’s market where banks’ lending requirements are becoming more stringent and employment contracts are becoming more fluid it is essential to sign that contract of sale “SUBJECT TO FINANCE”.


A good mortgage broker will try and make it happen, a fantastic broker will get you into the property.


Or at least be honest that you are not in a position to buy that particular property right now. A great broker will help you come up with a plan and provide you access to referral services to get you to home ownership in the next 3 months to 1 year.


But at what cost?* You wouldn’t ask a surgeon to do invasive surgery unless there was no other option or you had a serious accident. Nobody signs a contract of sale by accident, it’s a big purchase.


So if you are in the market to buy or refinance a property, come and talk to Jess and Rebecca  at Finance Prospects. We care about you, your family and your journey through life.


*this leads on to a whole other topic about why you should tell your broker everything. We will cover that in my next post- Non-Disclosure and Why It Matters.