A purchaser signed a contract to purchase a house which was to settle three weeks later.  He signed the documents at the bank to apply for a mortgage and then went away on holiday for a few weeks.  What this purchaser did not realise was that he also needed to sign the actual loan and mortgage documents once the bank had issued them with his legal advisor so that the bank could draw down the loan on settlement day. 

Fortunately the purchaser arrived back from holiday a few days before settlement and was able to see his legal advisor.  If he had not come back in time, and this caused settlement to be delayed, he would have had to pay penalty interest as the bank would not have been able to advance the loan funds on settlement day!

Before the bank can actually advance your loan to you and pay it to your legal advisor to be put towards settlement, you need to sign the loan and mortgage documents that the bank provides.  These documents will reflect the terms, interest rate and structure that you have discussed with your bank.  It is important to check that these documents are correct as they will override any previous discussions and documents you have signed with them.

Signing loan and mortgage documents with your legal advisor ensures that you understand what a mortgage is, what you are agreeing to, and the effect of the bank holding your property as security for the loan.  Loan and mortgage documents can be lengthy and complex, so it is best to have your legal advisor talk you through them.  Your bank will require correctly signed and witnessed documents, along with proof that the property will be insured from settlement day (with the bank’s interest noted on your insurance policy).

Make sure you discuss time frames with your legal advisor so that you can sign the documents in time for settlement day.

Michelle Buckley
Registered Legal Executive

Gender Equality
Super Gold Card 

If you are a New Zealand Super Gold Card Holder (Australian Senior Cards do not qualify) we will give you a 75% discount off the fee for one of our set fee 1 hour initial consultations. We will also give you a 17.5% discount off the first matter we handle for you and then 12.5% off any subsequent matters for you.  These discounts relate to your personal matters only (i.e. not business, trust or organisational matters or the sale and purchase of investment properties).

To receive the discount please let us know if you are a New Zealand Super Gold Card Holder.