Conditional Approval

Once you've had an offer accepted on a property you then need to go back to your Bank, which will review the property to make sure it complies with their requirements. Because of this it's important to include a clause in your Sale and Purchase agreement that makes the ability to obtain finance a condition of sale.

At this stage the Bank may ask you to meet some additional requirements or provide some additional documentation. If they are satisfied they will then provide you with a letter confirming Conditional Loan Approval. This means that your application has been approved with the condition that you meet some additional requirements. To accept this offer of conditional finance you'll need to sign it and return to your Bank as soon as possible.

These conditions usually require you to gather specific documentation relating to the property to allow the bank to determine whether your lending for the property will be officially approved.

These items may include:

- A Builder's Report
- A Registered Valuation
- Confirmation of House Insurance

The Bank should clearly explain what needs to be provided and the date they need to be provided by. It's important to remember that these things will need to be provided to your Bank in advance of the date your accepted offer is set to go unconditional, as they need time to assess the documentation and approve or defer/decline your loan. If you have any questions at this stage don't be afraid to ask your Banking Specialist - they're there to help!

Once you've talked to your Lender it's time to complete your to do's!

You should have a list of the tasks that your Lender has asked you to complete, as well as any conditions you put into the contract yourself.

Make sure that you gather the documents that your Lender requested in a timely fashion, as the sooner they're available the sooner you'll get to know whether your lending has been approved.

When making your offer you may have added in your own list of conditions that you want to be satisfied before the purchase becomes unconditional, including the ability to get finance. Some items on your list might be the same as what your lender requested, like a builder's report, but you might have also mentioned things such as a LIM report.

If you have conditions in your offer, you will also have agreed to a date that you need to complete these tasks before - the seller can't wait around forever! Make sure that you have completed all your to do's, including securing your lending, before this date so that you don't miss out on your home. If there are unforeseen delays you may be able to negotiate an extension through your solicitor, but it is much easier if you can avoid this by getting everything done on time.

A home is a huge investment, so it's important you have all your insurance sorted and ready to go before you take ownership of your home - the bank even requires it!

The insurance must cover full replacement of the property in the event it is needed. The insurance also needs to have:

- SBS named as a financially interested party
- Fire & Natural Disaster risk (including Earthquake risk)
- Any excess amounts and any policy exclusions

This insurance cover needs to be dated to start from the day you are set to take ownership of the house to ensure you are covered from day one.

While not a requirement, you should also look at getting contents insurance for your home to make sure you are completely covered. To find out more about what insurance cover you should consider check out our handy videos here or give the friendly SBS Insurance team a call on 0800 002 002.

Once you have provided the necessary documents to the bank your Bank will review the documentation to see if it satisfies the conditions of finance. If satisfied the Bank will be able to officially approve your loan!

When your loan has been approved and you are happy with the other conditions of purchase in your sale and purchase agreement your will be able to see your solicitor so that they can confirm you are now going unconditional.

This leaves just one more step before you get to move in to your first home - Settlement!