I have recently assisted a few clients with ‘off-the-plan’ purchases, and they have each had their own unique obstacles when it came to the finance process. ‘Off-the-plan’ purchases are typically apartments or townhouses that have been bought before they have been built. A 10% deposit is payable upon signing of the contract, and the remainder is paid once the property is built. When making a purchase like this, there are two important things to think about so that you aren’t caught out and unable to settle on your purchase.
Firstly, valuation may not come in on contract price, meaning that a strong equity position or a large cash deposit is an advantage when considering this style of purchase.
Secondly, not all banks feel comfortable with taking on property in certain postcodes. This limits the bank’s exposure to concentration risk.
Engaging a mortgage broker early in the purchasing process is a buyers first safeguard in ensuring that settlement time frames are met. Please feel free to get in touch if you are requiring assistance with securing finance for your off-the-plan purchase.