I Can’t Get A Finance Can I Have Refund | Investment Property FAQs| Property Investment in Australia

December 4th, 2023

Putting down a deposit on a property before securing finance is risky. If the bank declines your home loan later, your hard-earned cash could be in jeopardy. Empire 8 Property looks at how to safeguard your deposit.

The Cooling Off Period

When buying off the plan in NSW (New South Wales), there is a cooling off period written into contracts. This allows the buyer to withdraw if they fail to obtain finance.

The standard cooling off period is 14 days. Some developers may extend this to 21 days – check your specific contract. You need finance approved within this window.

Withdrawing Your Contract

If you try but cannot get formal finance approval within the cooling off period, immediately notify both your lawyer and developer in writing.

Declare that you are formally pulling out of the agreement utilizing the cooling-off provisions, as the necessary financial arrangements have not been finalized.

This must be done before the cooling off period expires. Past this date, your deposit is at serious risk if finance falls over later down the track.

Getting Your Full Deposit Refunded

After formally withdrawing from the contract within the cooling off period, the developer must refund your full deposit amount.

If they delay or avoid returning it, get your lawyer to follow up via formal legal letter. You are legally entitled to the full amount.

Essential Precautions

While the cooling off period gives you time, get your finance pre-approval sorted early. If approval takes longer than the 14 or 21 days, you lose the deposit protection.

Getting pre-approval before paying any deposit is safest. This proves you can actually get a loan for that property. Consider getting an official pre-approval letter from your lender to use as leverage too.

Taking these steps allows you to secure your deposit, should finance fall through when buying property. Contact us at Empire 8 Property for more information and guidance.