Property purchase loans for any kind of buyer

What is a property purchase loan?

When you buy property, a lender usually provides most of the price and takes the property as security. That arrangement is a property purchase loan. It sits behind everything from a first flat to a family home, a rental investment or a block of land.

The phrase is broader than “new home loan”, which focuses on owner-occupier buyers. This page is for the mechanics of buying: timing, contracts, costs and what to do when the purchase does not fit a bank’s template. If you are mainly after a home to live in, our new home loans page is the gentler starting point.

What happens between signing the contract and settlement?

Once a contract is signed or an auction is won, a clock starts. The typical sequence looks like this.

Stage	What happens
Offer or auction	Finance approval in principle is already in hand
Contract signed	Deposit paid, cooling-off may apply for private sales
Formal application	Documents lodged with the lender
Valuation	Lender’s valuer assesses the property
Unconditional approval	Conditions satisfied
Settlement	Funds exchanged, you receive the keys

Delays usually come from missing documents, valuation shortfalls or conditions that drag. Having your paperwork ready and your broker on top of the lender helps.

What costs come with buying?

MoneySmart’s home buying guidance reminds buyers that the purchase price is only part of the bill. In addition to the deposit, expect:

• Duty. Set by your state or territory revenue office. Victoria’s State Revenue Office and the Queensland Revenue Office, for example, publish first home buyer concessions and thresholds that change from time to time.
• Legal and conveyancing.
• Building and pest inspections.
• Lender fees.
• Lenders mortgage insurance, which often applies when the deposit is below 20 per cent.
• Moving and set-up costs.

Because the rules differ across the states and territories, the revenue office for the state you are buying in is the authority.

Which purchases are hard to finance?

Certain purchases do not fit standard bank rules, and these are where Ownright earns its keep.

• Auctions and tight settlements. No time for slow lender turnaround.
• Buying before selling. A gap between settlement dates; see bridging finance.
• Self-employed or low doc buyers. See self-employed home loans.
• Credit-blemished buyers. See bad credit home loans.
• Unusual security. Rural, acreage, small units or non-standard construction.
• Investment purchases with complex ownership. Trusts, companies or SMSFs; see investment property loans.

Each of these has options. They just are not found on a standard bank form.

What do lenders look at?

1. Deposit and savings history. Genuine savings are valued; gifts or family contributions need documenting.
2. Income and expenses. Verified, then tested against a buffer.
3. Credit file. Conduct and any defaults.
4. Existing debts. Including credit card limits.
5. The property. The valuer’s opinion and the lender’s appetite for that property type.

If the valuation comes in under the price, the lender lends against the valuation, and you fund the gap. Planning for that risk is part of a sensible purchase.

Who does this suit?

Anyone buying property, especially those whose purchase has an edge to it: a deadline, a quirk in the income, a property the banks consider unusual, or a purchase that depends on another sale. For first-time buyers with complications, see first home buyer loans.

How does Ownright approach purchase finance?

We like to be involved before you fall in love with a property. A short conversation early on often prevents expensive surprises. We explain your realistic borrowing range, show what costs will land on settlement day, and agree a plan if timing is tight.

Trevor Scott’s four decades in finance have taught the team that most deals do not fail on price; they fail on process. Our job is to keep the process on track, and to find a workaround when a lender balks. Where mainstream lenders cannot meet the deadline, we can look at faster routes and structures that others do not use, including urgent mortgage refinance when a purchase is paired with an existing loan problem. Ownright arranges property purchase loans Australia-wide from our Knoxfield, Victoria base.

Illustrative example

This is a hypothetical case for explanation. A buyer wins an auction on a property that needs an unusual title clause, and the bank he had in mind will not accept the clause. Settlement is a few weeks away. He is also self-employed.

A broker could pivot quickly to a lender whose policy accepts the title and take on the self-employed income, while confirming what the valuer will need. If the file fits no mainstream lender in time, a short-term private loan may bridge to a refinance later. The advantage is knowing the alternatives before the deadline bites.

Mistakes to avoid

• Bidding at auction without finance approval in place.
• Forgetting duty and other costs when setting a budget.
• Taking on new credit between approval and settlement.
• Assuming a valuation will match the price.
• Waiting until the last week to speak to a broker.

Documents to have ready

• ID and proof of address.
• Income evidence: payslips, or tax returns and BAS if self-employed.
• Bank statements showing deposit and savings history.
• The contract of sale and section 32 or equivalent vendor statement.
• Details of other debts and any property you plan to sell.

How do investment and owner-occupier purchases differ?

Lenders treat the purpose of the purchase differently. An owner-occupied loan is for a home you will live in. An investment purchase is for a property you will rent out, and the lender will consider rental income, the effect on your tax position and your existing portfolio. Many lenders apply different policies to each, including how much rent they count and how they assess your other property debts. Our investment property loans page deals with that in depth.

What can go wrong with the valuation?

A lender lends against its own valuation, not necessarily the contract price. If the valuer is cautious, the gap falls on you to cover. Common causes include fast-moving markets, unusual properties and thin comparable sales. To manage that risk:

• Build a buffer into your funds for a lower valuation.
• Ask your broker about the lender’s valuation process before choosing one.
• Remember that some lenders accept different valuation types for different properties.
• Consider the lender’s reaction to a shortfall, since some will negotiate and others will not.

Valuation risk is among the reasons we recommend speaking to a broker before bidding, not after.

What if I am buying through a company, trust or with a partner?

Buying in a structure other than your own name changes the finance. Lenders have their own rules on companies and trusts, including who must guarantee the loan and how rental or business income is assessed. Joint purchases mean both credit files and both incomes are weighed together. The legal and tax advantages and drawbacks of any structure should be confirmed with your accountant and solicitor. Our side is to line up the lender whose policy suits the structure, and to flag early if a structure will limit the choice. If you already know how you plan to hold the property, mention it at the outset, since it can alter both the lender shortlist and the documents you need.

Buying something and want the finance sorted?

Start your application and tell us about the property and the timeline. We will set out the options honestly. For more on choosing who handles your finance, read our guide on how to choose a mortgage broker. You can also send us your details or call 03 7043 7233.