Browse Forums Home Finance 1 Jun 09, 2019 12:27 am Have received unconditional approval for a loan however there are major problems with the property. Trying to get out of the purchase but struggling as there are issues with the contract clauses that no one picked up. Bank lender apparently need insurance to provide the loan, but insurance companies won't insure a house that has a roof with "major structural defects" and isn't to code. The contract is "subject to finance." What can happen now? Re: Insurance needed for loan, can't insure? 2Jun 09, 2019 12:34 am If the contract is subject to finance and you can’t get unconditional approval from the mortgage insurer - is that what you mean? Then get a letter from the finance company stating this and you can get out of the contract. You May be able to get your broker to write the letter even if the bank can’t because you can’t meet the terms of the finance. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Insurance needed for loan, can't insure? 3Jun 09, 2019 12:46 am becjarrettdalton If the contract is subject to finance and you can’t get unconditional approval from the mortgage insurer - is that what you mean? Then get a letter from the finance company stating this and you can get out of the contract. You May be able to get your broker to write the letter even if the bank can’t because you can’t meet the terms of the finance. Thanks for the reply. Have been granted unconditional approval, prior to the building inspection. There is major defects that the seller is trying to find a quick fix for by doing cheap repairs (it needed a whole new roof for $45k) If the house can't be insured, can the bank deny a mortgage? Re: Insurance needed for loan, can't insure? 4Jun 09, 2019 3:24 pm So it’s house insurance not mortgage insurance? Refer it back to your solicitor. I would suggest the house is not as represented & that’s your out, but generally you’ll have to have insurance to settle on the loan....which technicality May assist you. Rebecca Jarrett-Dalton Property crazy expert mortgage broker, love building new homes! Two Red Shoes mortgage broker http://www.tworedshoes.com.au/building Re: Insurance needed for loan, can't insure? 5Jun 09, 2019 11:16 pm becjarrettdalton So it’s house insurance not mortgage insurance? Refer it back to your solicitor. I would suggest the house is not as represented & that’s your out, but generally you’ll have to have insurance to settle on the loan....which technicality May assist you. Yes the house insurance, LMI wasn't needed. Thank you i'll follow up with a solicitor. The biggest challenge will be if you take out a loan and then run out of money - you'll have an incomplete security and lenders do not like this so you can get stuck.… 2 19068 Hi there, long-time lurker but first time posting. I've bought a house 2 and a bit years ago and last year we had some major water damage on a converted pergola area… 0 7925 I apologise for any confusion, but your understanding is correct. We approached our situation differently based on advice from… 11 53177 |