Finance Condition

If your offer is conditional on finance you are obligated to do everything reasonably practicable to obtain finance. Even if you have “pre-approval” from your bank or lender, this is usually conditional pre-approval and there is a lot of information the banks require about the specific property you wish to buy. There can be quite a few things to organise to get your lender the information they require to confirm they will lend you the money to buy the property.

You must confirm with us by midday of the day the condition is due whether or not the finance condition is satisfied so that we can inform the vendor’s solicitor.

What you need to do:

1. Discuss with your lawyer if you have allowed enough time to complete everything that is required
2. Provide your bank contact or mortgage broker with a copy of the agreement as soon as possible
3. Provide your lawyer with your mortgage broker or contact details asap
4. Get a full list of everything your lender requires to approve finance from your lender or mortgage broker
5. Organise relevant inspections as per your lending requirements, this may include:
   • Building Report (see building report section) – your bank may require a copy of this report, if required you should try to get this to them at least 5 working days before your finance condition is due
   • LIM report (see Land Information Memorandum (LIM) section) – your bank may require a copy of this report, if required you should try to get this to them at least 5 working days before your finance condition is due
   • Valuation
6. Provide copies of the required reports to your mortgage broker or lender
7. Provide your broker or lender with information about your bank deposit – i.e. the money you are contributing towards the property (and will not be borrowing) – KiwiSaver, Money from parents
   • If you are borrowing money from parents you will need to document this so the bank understands any terms you have agreed
   • If you are receiving a gift of money from parents you will need a Deed of Gift to confirm this to the bank
   • If you are using KiwiSaver you will need your KiwiSaver pre-approval letter from your KiwiSaver provider
8. Your mortgage broker should provide you with a full list of everything required by your lender for them to approve the finance
9. Confirm with us if the condition is satisfied or unsatisfied.

 

Frequently Asked Questions Regarding Finance

I already have pre-approval, doesn’t this mean my finance is sorted?
No. Most finance pre-approvals are conditional. The bank needs to satisfy its own due diligence on the specific property you wish to buy – your finance is not confirmed by your bank until you receive a formal offer in writing (we can check the offer if you need us to).

My bank requires a valuation, can I choose any valuer to do the valuation?
Many banks have one specific valuer they require you to use, or you must pick from a select list of valuers the bank requires you to use. If the bank stipulates you must use a specific valuation company, this is your only option to obtain finance. Your bank contact or mortgage broker will provide you with this information.

How do I organise a valuation to be done of the property?
You will need to liaise with the real estate agent (or vendor if it is a private sale without a real estate agent) to arrange a time for the Valuer to complete the valuation inspection.  The vendor must provide you with reasonable access, however it is best to try and organise this as soon as possible to avoid any unnecessary hiccups or delays.

How long will the valuation take?
It will depend on who you use to provide the valuation but you can expect this to take 3-4 days to arrange and then to receive the report back, so you need to allow sufficient time.

What happens if I can’t get everything done in time?
If it looks like you won’t be able to organise everything in time to meet the finance condition deadline, you need to talk to use as soon as possible. We can request an extension from the vendor’s solicitor. It is entirely up the vendor whether they allow the extension or not.

What happens if my finance isn’t approved?
When you have made an offer conditional on finance, you are expected to make all practical efforts to obtain finance. If you are having issues obtaining finance, you should discuss this with us as soon as possible. We may be able to assist you to get finance through another type of lender, and we can check that you have completed all the steps required to meet the legal measure of “all practical efforts”. If, having done all of this, you are still unable to obtain finance, you need to let us know that the condition is unsatisfied. We will then inform the vendor’s solicitor. As with all conditions this must be done as early as possible on the day the condition is due.