Buying a property today is never straightforward. There are many checks and balances that must be carried out before you can pass GO.
If you’re getting a loan from a bank, the main consideration is whether you can borrow enough funds. But the other important consideration is confirming the title to the property will be acceptable security for the bank.
As part of registering the mortgage, we must inform the bank of anything registered on the title that could affect the bank’s mortgage.
Some title interests can create mortgagee rights and that could affect the bank’s mortgage. Those rights could have priority before the bank’s mortgage, or, impose additional costs you need to pay if you breach your obligations. These types of things are most commonly found in developer land covenants or residential society and council encumbrances.
That makes it super important to get the title to the property checked while your purchase agreement is still conditional, as part of your finance approval. Ideally you would do that check at the earliest possible point.
So, buyer beware. Confirming finance or due diligence without the bank's approval of the title, could see you at risk of having your lending withdrawn.
Bank delays approving our title reports can impact timeframes too and could mean you need to request an extension on your finance, so remember to factor in the time to get the check done.