Step 5 is the most exciting step; it means you are moving forward! You have decided on your strategy, made a plan, you have done your research, decided on your purchase and now you are signing the contracts. You will need to have your legal representative go over the contract or contracts plural if you are buying a dual contract property and check all the clauses. If you are not an expert in this area I highly recommend that you DO get a solicitor to check out the contracts before signing them. You will need to add your own clauses, such as finance, building and pest, due diligence and any other clauses you might want put in.
You might need to have your builder organised and if doing a new build, the architect or building designer will need plans and specifications so that the builder can draw up a fixed price building contract. There is always a lot of paperwork and it is nice to have someone hold your hand through the purchase process.
This is where it gets real, you will need to have access to your deposits, apply for the First Home Owners Grant if applicable, sign bank applications, you will need to provide a lot of documents for finance here is an example of some of the documents needed;
• Current Drivers Licence and or Current Passport (both is preferred)
• We may also need a Birth Certificate or Certificate of Citizenship
• Marriage Certificate
Income Details for Salaried Applicants
• 2 most recent pay slips – computerized with year to date and ABN of employer
• Last financial years payment summary (group certificate) only if bonuses or over time was paid
• We may need your current employment contract or employment agreement OR letter from employer stating rate of pay, length of service and current employment status
Income Details for Self Employed Applicants
• Two most recent years ATO Tax Returns and Tax Assessment Notices (both personal and business)
• Balance Sheets and detailed Profit and Loss Statements covering the most recent two years for the business
• Details of external liabilities (leases, hire purchase, overdrafts, company loans and/or guarantees)
Your Contribution (Deposit)
• Evidence of 5% genuine savings showing 3 months savings history
• 3 months worth of latest bank statements, savings accounts, term deposit statements or share certificates
• If additional funds are being put towards the purchase, evidence will be required as to where the funds are currently held, or if the funds are being gifted, a Statutory Declaration from the gifter will be required. Bank statement will be required to show the money
• Most recent 3 months worth of statements for any existing Home Loans – this must have your name and account number on it
• Latest 3 months statements of any personal loans/car loans – evidence confirming current monthly repayments
• Latest statements for all existing Credit Cards and Store Cards
• Estimate of current monthly lifestyle expenses
• Council Rates Notice for each property owned
Superannuation & Investments
• Latest Superannuation statements for all existing funds – old and new
• The latest 3 months worth of statements for any shares, managed funds, term deposits, plantations or other investment portfolios
• A fixed price building contract between the borrower and a licensed builder
• Plans of the new property that have been approved by the Local Council
• Detailed specifications and costings for the construction
• Evidence that construction is being undertaken or supervised by a registered and insured builder who takes full responsibility for the construction and is able to provide appropriate guarantees as required by the various State legislatures
• Details of insurance for builders risk
That’s a big list!
Once the loan is approved, you will need to provide a copy to your solicitor and satisfy the finance clause in the contract, going unconditional on the contract or exchanging the contract if you are located in NSW. If buying an existing property, you will need to organise a building and pest inspection, or soil test if building new.
The process from signing the contract to settlement will take anywhere from 21 days to 2 years if buying off the plan. It depends on the term in the contract.
Let the excitement begin!