Finance Conditions

Before you sign an Agreement for Sale and Purchase (“Agreement”) we recommend that you obtain pre-approval of finance (“pre-approval”) from your bank or through your mortgage broker. Pre-approval of finance gives you confidence of your price range when looking for a property.

Pre-approval is not a confirmed offer of finance from a bank.  It is actually conditional approval and it does not mean the bank has agreed to finance a specific property. When you have found the right property and you are ready to make an offer, you need to make sure that the Agreement is conditional on finance even if you have pre-approval.

Usually your bank will want to see the Agreement and decide whether the property meets their home loan requirements. Even though you have pre-approval, there may be something about the property that the bank believes is risky, and they may want a valuation or a building report before agreeing to finance the purchase. If your bank does not agree to lend you the money and the Agreement is not conditional on finance, you will be left in a difficult situation and you may not be able to cancel the Agreement/forced to buy the property.

If you are a first-home buyer, pre-approval of finance is often conditional upon you being approved to withdraw your Kiwisaver contributions and/or obtaining the Housing New Zealand HomeStart Grant.  If this is the case, you need to be organised so that you can meet the strict timeframes of your Kiwisaver provider and Housing New Zealand.

As always, we recommended that you obtain your solicitor’s advice before signing any Agreement for your protection. The team at Saunders Robinson Brown are happy to assist you.

The above information is of a general nature only. You should contact our firm for advice relating to your specific circumstances.