#1 Not getting a written loan approval before making an unconditional offer. If you’re unable to organise this, please avoid a costly headache by inserting a “subject to finance” clause.
#2 Not having your solicitor check the sale & purchase agreement, or at the very least, insert a “subject to solicitors’ approval” clause in the agreement. A solicitor plays a key role in outlining the buyer's obligations, so it’s imperative that you have them spell out exactly what you’re signing up for.
#3 Not exploring all the lending options, or working with a professional adviser who will do it for you! Don't make your decisions purely on the best available interest rate. A cheap rate doesn't always mean a cheap loan! There are all sorts of other costs & implications - you must consider costs over the lifetime of the loan, not just monthly repayments. Remember, we work with various lenders and know all about the different lending criteria, which means we’re in a great position to advise where your lending is best placed.
#4 Mis-judging the cost of new builds & renovations. Nine out of ten times you’ll exceed your building budget – so you need to prepare for this. Allow for unexpected costs & if possible, try to secure fixed cost contracts from the beginning.
#5 Not having your insurance sorted prior to settlement. Once the sale is unconditional you’re legally required to settle on the agreed settlement date, regardless of whether you have insurance cover or not. If you don’t have adequate insurance on settlement day then the lender will not advance the funds!
#6 Not understanding the tax implications of purchasing a rental property. To find out exactly what the tax requirements are (and any tax benefits you’re entitled to) we can guide you on this but, you should also speak to your accountant prior to signing the sale and purchase agreement.
#7 Not identifying any GST obligations. For some purchases, e.g. commercial property, paying GST is mandatory. Often it can only be claimed back once it has been paid, and not all lenders will fund the GST during the interim. It’s important you explore all the options.
Team up with a good adviser and you can be confident you’ll steer clear of all of these mortgage mishaps. Get in touch with the PFG team & we’ll make sure you don’t make any expensive & emotionally exhausting blunders!