Backing out of conditionally approved loan

Discussion in 'Loans & Mortgage Brokers' started by Grey Smith, 18th Apr, 2019.

Join Australia's most dynamic and respected property investment community
Tags:
  1. Grey Smith

    Grey Smith New Member

    Joined:
    16th Apr, 2019
    Posts:
    2
    Location:
    Sydney
    Thinking about backing out a conditionally approved joint loan. Due to disagreements with the other party. The bank in question is the CBA. The only thing listed as needed is contract of sale. What can I expect?
    Thank you in advance.
     
    Grey Smith, 18th Apr, 2019
    #1
  2. Perthguy

    Perthguy Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    11,767
    Location:
    Perth
    You can just not sign but then what happens with your purchase. Years ago I got conditional for a loan but didn't bother to sign the loan documents. Then my parents called asking me if I could loan them $100,000 within 3 businesses days so their latest purchase cpuld settle. Lucky my loan docs were still live because it takes longer than 3 days to have a loan approved. I signed the loan docs and got the funds to my parents in time. If I had simply left the docs unsigned then the loan docs would have expired.
     
    Perthguy, 18th Apr, 2019
    #2
  3. Peter_Tersteeg

    Peter_Tersteeg Mortgage Broker Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,171
    Location:
    03 9877 3000
    You could simply call the broker or banker and instruct them that you're pulling out of the loan and withdrawing your consent. The loan will be cancelled.

    Also, don't sign a purchase contract. Don't sign loan offer documents. Even if the loan isn't cancelled, if you don't consent to these two things, I doubt there's much the other party can do about it. They might enter into a contract, but you haven't.
     
    Peter_Tersteeg, 18th Apr, 2019
    #3
  4. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

    Joined:
    18th Jun, 2015
    Posts:
    42,005
    Location:
    Australia wide
    A conditional approval is not a contract but an offer subject to conditions. Even if the bank gave you full approval it is still an offer until you accept it. Even then if you accepted the offer by signing the loan agreements and mortgages you could still put out with only minor costs payable to the bank - or none possibly.
     
    Terry_w, 18th Apr, 2019
    #4
  5. Jamie Moore

    Jamie Moore MORTGAGE BROKER - AUSTRALIA WIDE Business Member

    Joined:
    18th Jun, 2015
    Posts:
    3,980
    Location:
    Canberra, Brisbane and Sunshine Coast
    Not a whole lot.

    Just tell your banker/broker that you're withdrawing your application. Easy peasy.

    Cheers

    Jamie
     
    Jamie Moore, 20th Apr, 2019
    #5
  6. Westminster

    Westminster Tigress at Tiger Developments Business Member

    Joined:
    3rd Jun, 2015
    Posts:
    11,357
    Location:
    Perth
    It's easy enough to back out of an offered loan as there is nothing to back out of if you haven't signed.
    However it is not so easy to back out of a sales contract with the other party and there might be ramifications for that. If there is a finance clause on the contract then backing out of a finance offer does not equal a declined finance and therefore you might lose deposit and be responsible for any loss the seller encounters with having to put back on market, new marketing, potential lower sales price etc
    Even if there is no finance clause then you are still trying to cancel a sales contract and will need to get some advice on the repercussions of this.
    Or do you mean disagreement with the other party you were going on the loan with not the Seller?
     
    Westminster, 21st Apr, 2019
    #6