If a Contract of Sale specifically conditions that the Purchase is subject to you obtaining finance, then it is your responsibility to ensure that you make every attempt to obtain finance approval by the specified date. If the finance has not been obtained by this date, you may request an extension to allow further time for approval to be given.
The Contract will also specify the period for when the purchaser must either withdraw from the purchase (usually two clear business days, but check the Contract)or request the extension. If a written request for either the Contract to be canceled or an extension is not provided to the vendor or the vendors agent within this time, the Contract of Sale can fall unconditional and the Purchaser will be locked into the Contract.
If the due date for finance falls due and the Purchaser has not been able to obtain finance approval, they can withdraw from the Contract providing they have provided written notice to the vendor or the vendors agent, and are not in default of any other condition of the Contract of Sale.The Vendor may also request proof that the Purchaser has made immediate application for the loan, has done everything reasonably required to obtain such loan approval, and has a letter of decline from the bank or lending institution.
Once you have received an offer of mortgage, it is then your responsibility to comply with all terms and conditions of that mortgage. You should also ensure you are aware of any financial implications by way of penalties or interest upon early redemption of the mortgage. Should you also be providing some of your own funds at settlement, then it is your responsibility to ensure that the adequate sum in the form of clear funds (ie a bank cheque) are made available at the appropriate time. Please be aware that generally, personal cheques, trust cheques, money orders, credit co-operative cheques, and building society cheques are not acceptable tender at settlement.
For further information or specific questions answered, please do not hesitate to contact us.