Finance condition to FHOG

[goldfish]

Ok another question from me today.

I am buying a house. I have obtained so-called unconditional finance approval. Then when I actually got the finance agreement from my broker it states a special condition which is that the finance is subject to me obtaining the FHOG.

I have querried this as I am not happy with that condition what so ever. I am not 100% sure that I will get the FHOG.. long story.. I am possibly 90-95% confident that I will get it, but you just never know.

Broker says that this condition is only in there for the cases where the FHOG is used to pay part of the deposit then the bank need to ensure that they get their money etc. I am paying the deposit out of my own pocket and the FHOG is not used for this, so my situation is different. But because the FHOG application goes through the bank it forms part of the loan. I have tried to have this condition changed, but my broker says that we will need to resubmit the loan application without the FHOG application, and this time of year it can take weeks! (yeah.. I know what he wants me to do)

So I have to decide on whether to take the risk that if I don't get the FHOG the bank can withdraw their finance. I have an email from the bank (the business development manager) stating that in my instance the FHOG will not dictate the approval of the loan on the provision that I come up with $14000 of my own funds. (which is not a problem for me). According to my solicitor the email is helpful but doesn't override what is in the loan agreement.

Obviously they might not withdraw the finance if I come up with the $14000 myself, but technically they can. I might be able to get finance elsewhere if they do withdraw it, but who knows at what rate? In the worst case scenario, I won't have finance at all and will loose the 10% deposit + what other costs it may have incurred.


Is this too big a risk to take? (or am I as my broker would say worrying too much?)


Thanks
GF

PS I know understand why people say that buying a house is one of the most stressful things in life

 

[Peter_Tersteeg]

If the FHOG is declined your broker should be able to demonstraite that you can still settle without it. It will take a few days to get this extra processing through, but they will still approve the loan unconditionally in the end.

You probably are worrying a bit too much.

I also noticed you're in the ACT. If the FHOG isn't approved and you don't get the stamp duty duty concessions don't come through for you, will you still be able to settle? I just want to make sure you've considered this as it's easily overlooked.

 

[goldfish]

Hi Peter,


Thanks for that reassurance, it has made me feel a bit better.

If I don't get the stamp duty concession I will still be able to settle as well.

After a couple of days worrying about it, I think that I also have reached the conclusion that it should be possible for me to obtain the finance anyway. But since I don't have any experience with lenders what so ever, I thought I would ask the question.


GF

 

[Peter_Tersteeg]

Just be aware, if the FHOG is rejected, your broker will probably have to make some calls and send some faxes. The bank will need to re-assess the application which will take a few days (at least) but a new application shouldn't be required.

I can't really remember an application where the FHOG was rejected though, so I never bother to loose sleep over it. First time for everything though.