How many days should we have for a finance clause?

This is always a difficult question. Firstly, consult your mortgage broker as to what is the best plan. Secondly, bank turn around times can dictate this and so can deposit size.

Sometimes bank turn around times are slow, for example recently when it was Easter, ANZAC Day and school holidays. In this scenario conditions on offers had to allow around 10 days for finance especially if you had not previously prepared any application paperwork.

If you are a low-deposit first-home buyer, often a 10-day clause may be required for a complex situation where not all the supporting information has been received or a valuation is required. If you are a low-deposit buyer and have a live approval, a 5-day clause can often be enough time to allow for a registered valuation to be done. This is normally a requirement of any bank when a deposit is less than 20%.

If you have 20% or more deposit speak to your mortgage broker well in advance of any deadline or auction. It’s possible we can get a draft sale and purchase agreement and disclosures ticked off by a bank well in advance of any offer so that a finance clause can potentially be removed, thus making your offer stronger.

If you have not started any mortgage application paperwork and want to put an offer in on a house ASAP, then allow a 10-day finance clause if you can. Otherwise contact us today to get prepared.

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