MOVE FAST, BE PREPARED

Delays are inevitable in gaining finance, but there are ways to help

THINGS continue to move in a direction somewhat approaching normal, as restrictions continue to lift in Queensland and activity increases little by little across most segments of the market.

While “Under Contract” signs are fast popping up, plastered over many property “for sale” signs, one thing that hasn’t sped up is the pace of most banks. It seems finance clause timeframes continue their climb upwards, with 14-day finance now a dream and even 21 days an ambitious undertaking. It’s now common for many banks to require upwards of four weeks to have an application considered and dealt with.

As a buyer, there are certain things you don’t have much control over when it comes to that process. That said, you can actually reduce some part of the delays by ensuring you have all your documentation ready sooner rather than later.

Given we’re now in July and into the new financial year, this is even more critical as quite often banks will be looking for your most recent tax return to provide the best indication of your current financial position. Combine the need for up-to-date data with (hopefully) a refund back into your pocket and there’s twice as much motivation to see your accountant early.

But before you go looking for that new flatscreen TV you’ve always wanted, don’t forget that on the fringes of LVR caps, an extra couple of grand can make a big difference in how many lenders will consider your application favourably and what interest rate you might have to pay.

Aside from the obvious benefits of obtaining finance and being in a position to settle on your new home, having everything prepared prior to making an offer can be the difference between a successful contract or otherwise. More and more we’re seeing situations with multiple offers being submitted on properties, and anywhere you can improve your offer, even with something as simple as a shorter finance clause and settlement timeframe can be beneficial.

If you’ve already signed a contract and gone with a shorter finance clause date, you can still request an extension of the seller, but they’re under no requirement to say yes. They can also choose to allow a contract to terminate and move on.

So, if you do find yourself in this position, do yourself a favour and be upfront with the agent (and owner) with your request.

A detailed letter stating the (reasonable) “how’s and why’s” of an extension will be more likely to see an affirmative response in your favour over a blunt “we want more time” approach.