If you are not 1 sure that your bank will finance your purchase then the contract should be made subject to finance. One clause you should give particular attention to is the subject to finance clause. In other words, the property purchase becomes conditional on you being able to get finance (a mortgage). See full list on finder.
A subject to finance clause tells the vendor ( property seller ) that you legally agree to the purchase on the condition that you receive formal home loan approval from your bank. It protects you from losing your deposit or being sued for damages by the vendor should your loan be declined.
However, there are slight differences between each state. If worded properly, and followed to the letter, a “ subject to finance” clause can be an important protection for the property purchaser. If not worded properly, or if the purchaser’s conduct is contrary to the terms of the finance , then a “ subject to finance clause” can, on the contrary, be weapon that may be used by the vendor. So, for instance, if your finance falls through and you didn’t protect yourself with a subject to finance clause , you might find your self in a sticky situation.