When a client of ours recently purchased a new investment property, his current lender found a clause in the contract that caused them to disapprove the loan request. Our Launch Finance broker took the time to research other alternatives and quickly found an appropriate lender who would not have any issues with that particular clause in the contract.
The client in question already had the purchase of his new investment property lined up when his current lender decided that they couldn’t approve the loan due to a clause in the contract of sale. The deal was referred to the bank’s legal and credit departments to determine whether the loan could be approved or not, and these departments stated that if the clause stays in the contract, they couldn’t approve the loan.
The clause in question was simply a buy-back option for the developer if the client wished to sell the land prior to building a home. The rejection of this clause presented a huge stumbling block to the client’s investment plans and was unjustified in the eyes of the client and broker, especially since the client had an affixed price building contract.
In a bid to help this client finalise their finance before the property deal fell-through, the Launch Finance broker negotiated an extension of finance with the land agent and researched further lenders who would not object to the clause in the contract. As a result, the application was lodged with an alternative lender and the deal was approved a short time later.