When Do I Own' My Loan?

By Geri Forsaith, Sydney Property Conveyancing

When obtaining a loan, each purchaser, known as the mortgagor, will be provided by their lender, known as the mortgagee, a set of loan documents plus their terms and conditions that will set out, among other details, the mortgagee's fees and charges.

Loans for residential property are regulated by the Consumer Credit Code and mortgagees are required to disclose all relevant information, including interest rates and fees about your loan, before entering into the loan agreement.

The mortgagee may vary any provision of the loan agreement as they choose before and after the loan has been advanced.

If a Consumer Credit Code, the Code of Banking Practice or the Electronic Funds Transfer Code of Conduct applies to your loan agreement, the mortgagee may only make changes in accordance with those codes.

These changes must be notified to you in writing either directly or by media advertisement. The change will take effect from the time specified in their notice.

The mortgagee will not make the loan advance until all their settlement requirements are met a few of these requirements are:

  • The title to each security property is satisfactory
  • All searches, certificates and valuations relating to the security property have been provided and are satisfactory
  • Evidence of council, water and other rates and taxes have been paid for the security property
  • Nothing has happened since you first applied for the loan that may be detrimental to your financial situation

Your loan will become yours' when settlement of your purchase has taken place, and typically the first loan repayment will be due 30 days after settlement date.

To ensure you are fully informed of your loan terms and conditions, it is wise to obtain advice from your conveyancer/solicitor before signing your loan agreement.

Article originally appeared in Your Investment Property Magazine, February 2010,p.15 www.sydneypropertyconveyancing.com.au