...
Kredi Home Loans
APPLY NOW
Search
Close this search box.
  • Insights, Loan basics
Should you exchange contracts without a loan approval?

Oktay Sengoz

|

25/10/2022

|

1 min read

You really like a property. The agent is pushing you to sign contracts and waive your rights to a cooling-off period. You’re stuck, your mortgage broker has told you not to sign any contracts without an approval, but you really like this property, and you want to avoid losing it.

What do you do?

Here are the risks with signing contracts without a pre-approval

You could lose your 10% deposit

If you don’t have a conditional approval from the bank, and you cannot obtain finance through another bank, you will lose your 10% deposit. Better still, you could be sued by the vendor for further costs if they cannot on-sell the property to somebody else for the same price or higher. This is a big risk to take.

The property may not be accepted by the lender

A bank will carry out their own independent valuation on the property to not only determine the value but to also ensure the property is suitable to the lender. If the property is not suitable to the lender, you may struggle to find a lender that will accept the property.

Contract changes

Once the contract has been signed, you accept the contract as it’s presented to you and agree to all the terms. The terms may be one-sided and benefiting the vendor, but you haven’t checked this. Who goes through 80 pages of terms?, not you? Once contracts are signed, it’s very hard for the contract terms to be changed.

Buyers beware, make sure you don’t sign contracts until you are advised it's ok to do so.

Schedule a call

Share this article

Related articles

Kredi Home Loans

1300 0 Kredi (1300 0 57334)

hello@kredi.com.au

Instagram
Facebook
Linkedin

ABN 70 650 586 048
Kredi Home Loans Pty Ltd

Home Loans

Calculators

Insights

We are here to help

Get in touch with one of our dedicated Kredi experts.

call

1300 0 Kredi (1300 0 57334)

Mon - fri 9am-5pm (AEDT)

meet

Book an online appointment

email

hello@kredi.com.au

Seraphinite AcceleratorOptimized by Seraphinite Accelerator
Turns on site high speed to be attractive for people and search engines.