Help! First Home Buyer with Settlement Approaching

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  airzone on 26/11/2015 - 22:47

  +4

  You're paying your conveyancer to organise this for you. They do the settlement calculations and work with the mortgage holder and vendors solicitor to make it work. They will ask you to draw bank cheques for any amounts not being covered by the loan.

  It would be a good idea to have cash immediately available. You do not need to put everything in your ing account, just enough to cover the yearly fee. I would suggest keeping it in anz.

  After the dust settles, then rearrange your finances as you see fit.

  • 

    airzone on 26/11/2015 - 22:52

    +3

    P.s. Your legal guy will order cheques from ing. You just have to worry about your own contributions. And for a first timer, take the day off work.

  • 

    mustard on 26/11/2015 - 22:52

    Thanks so much airzone! I got told by my broker that I should have my funds available in the Orange Everyday account a few days before settlement, would this suggest that Gadens should be organising the cheques?

    I'm really concerned about my solicitor/conveyancer at the moment and the quality of information they have provided me so far… Would you suggest having enough in my ANZ account to cover stamp duty payable, adjustments, solicitor's fees, and title registration fee? What about the cheque to the vendor?

    Thanks in advance!

    • 

      airzone on 26/11/2015 - 23:02

      Call your conveyancer tomorrow and confirm what they expect the procedure to be.

      What it should be is something like this:

      Vendor's solicitor will advise yours of the payment breakup (i.e. the amount to pay the existing mortgage holder, the vendor, the RE commissions, etc)
      Yours will take that, and also work in your own costs - stamp duty, solicitor costs, etc
      Yours will then work out how much ING is giving you, and how to split that up. They will direct ING (through Gadens) to write those cheques out
      Yours will then advise you what cheques you need to provide
      You will have those cheques drawn

      All of this takes place in the week prior to settlement.

      I only put about $500 in my orange advantage account, enough to cover their fees. Everything else was still in CBA where I could access immediately. Staying fluid is important. I would suggest you keep as much as possible to cover any additional hidden costs (there's always something). Don't forget that you will probably want to change the locks on that day, etc.

      • 

        mustard on 26/11/2015 - 23:14

        Thanks again airzone for the advice, it's definitely helped me calm down a bit. I will give my solicitor a call tomorrow to work this out, it sounds as though I need to know what occurs during settlement in general! I guess my concern was that the loan amount is only about ~65% of the purchase price and so that shortfall I'm wondering if it should be in my Orange Everyday account for Gadens to write the cheque out to the vendor or what not. Will give my solicitor and broker a call tomorrow anyhow, thanks again and have a good night!

      • 

        airzone on 27/11/2015 - 00:42

        +1

        @mustard: Gadens will only care about the loan amount. They are acting on ING borrowing's behalf. Any money you have in any other account (ING Orange Advantage included) is your own business, as long as you can pay the vendor. Gadens will not issue a cheque out of your savings account - they are only authorised to disburse the loan proceeds according to your solicitor's instructions.

        Congrats on buying first property with only a 65% loan… My first one was 95%… >_<;

      • 

        mustard on 27/11/2015 - 05:54

        @airzone: thank you! It's really been an up hill battle, it was more that I wasn't even able to borrow anymore with my salary. Surprisingly, I was eligible to borrow $50k + more with CBA, even at a higher interest rate!

        I got caught up in the frenzy of the Melbourne market and panicked in the sense that I wanted to get my foot in the door before it was too late. Now I'm wondering if it was the right decision with all of this financial stress and the way the market has turned recently :( nothing I can do about it now though

      • 

        eatwell365 on 27/11/2015 - 07:20

        +2

        @mustard:

        do not beat yourself too hard. few words:
        no one has a crystal ball.
        property is almost pricey at the time of purchase.
        any business = any decision in life ….balance of risk and return.

      • 

        mustard on 27/11/2015 - 07:55

        @eatwell365: thanks for the words of encouragement! I know it's going to be hard, especially the first few months, but yes hopefully it all works out in the end. If you couldn't tell already, I'm a stress head!

• 

  IIGnomeII on 26/11/2015 - 22:56

  +1

  Hi Mustard,

  I'll try and remember the steps we went through a few years back. (This was specific to our case however)

  1) Get contracts from sellers agent, this should set out the amount for the deposit along with cut off dates etc.
  2) Organise funds from bank or mortgage broker for the amount you require. They will usually work out the total amount you will need including all the fun taxes you need to pay
  3) You will need to then find a lawyer that does conveyancing that will look over the contract, take the signed contracts from you along with the cheques for the deposit and send them off to the agent.
  4) Once that is all done there is the cooling off period after the contract exchange and you wait it out to see if there are any issues and eventually move in.

  So in short, read over your contract from the agent and speak with them if necessary. They will tell you how much of a deposit you are meant to be paying.

  • 

    mustard on 26/11/2015 - 23:02

    Hi IIGnomeII,

    Thanks for your help! I've already paid the deposit (10%) when the contract was first signed but I guess my issue now is the remainder of what I owe and how on earth I organise to get it paid on settlement day. I'm stressed as my funds are quite stretched and I don't have a lot of room to move/any back up funds.

    • 

      IIGnomeII on 26/11/2015 - 23:08

      Fair enough, I would take Airzones advice above and get in contact with the solicitors and agents tomorrow.
      They will clear it up for you.

• 

  eatwell365 on 26/11/2015 - 23:01

  +1

  1. should be calm. speak to your conveyancer/lawyer, estate agent and mortgage broker/lender. you should not have to worry about settlement. these guys take your money and should give the best advice.

  my problem is I have no clue how much they need to be…until few days prior.

  From experiences, there will actually be more than one bank cheques for the settlement. loan money from ING, and some balance from your own saving account.

  Normally lawyers should discuss amount themselves and as how owner would like the cheques to be made the week/s prior.

  Eg. The house is $1mil. Bank loan $850k. Downpaid 10%. ING cheques will be a fixed amount, so cheques can be preordered. Don't think you will see the ING cheques, as bank rep will be present cheques on settlement, in exchange the land certificate, The final calculation may be made few days prior to settlement eg pro rata bills etc, you can then organise the bank cheque from your own account to pay for the balance.

  Many ways to skin the cat so speak to the professionals. No need to panick.
  Make sure you inspect and are happy with everything in the house before settling on the date.
  Next to Zero chance to complain once cheques are over.

  Congrats and good luck.

  • 

    mustard on 26/11/2015 - 23:10

    Thanks eatwell365!! I think I will have to give my conveyancer a call to sort this out. It sounds as though I will need just enough in my ING account to cover the purchase price less deposit (including the loan amount) and as per airzone's comment, the ING fees, and the rest I should keep in my ANZ account to organise the relevant cheques.

• 

  donbot on 27/11/2015 - 09:09

  +1

  When I settled with ING - they needed to have my funds that I was contributing to the settlement in my orange everyday account. They then organised the cheques that were required.

  Its a very easy process - Gadens and ING will work it all out… thats what your paying them for. You just need to make sure you've got the funds that they need to settle available to them when they need it.

  Dont try and confuse and make the situation more difficult by trying to arrange cheques yourself and introduce ANZ as another source of headache.

  • 

    mustard on 27/11/2015 - 23:32

    Thanks tizey, your answer helped a lot! I spoke to a few other people I knew who have mortgages with ING and they told me the same thing.

    I got fed up and emailed Gadens myself and I've been told I need an 'exception' and that my broker needs to organise it with ING, so here's hoping I hear some positive news on Monday! :)

  • 

    mustard on 01/12/2015 - 10:52

    Hi tizey, quick question - did you go with the Orange Advantage loan? They are giving me a lot of grief about this and saying that it never happens.

    • 

      donbot on 01/12/2015 - 10:56

      +1

      Yes - it was a Orange Advantage.

      Reviewing the emails from the time to make sure I've got it right - what happened was I had to have the money in my ING Account and then authorise ING to directly transfer the amount as agreed between my lawyer and Gadens (via SWIFT) to Gadens, who then drew the cheques.

      110% I did not arrange any cheques.

      • 

        mustard on 01/12/2015 - 11:00

        Thanks so much for your quick reply. Looks like I might need to get my lawyer to speak to Gadens then. I wish I had never gone with ING - my broker initially told me that all I needed to do was to have the funds in the Everyday account and now I am stuck in this situation.

        From what I am aware, most of the big banks make the relevant arrangements as well.

      • 

        donbot on 01/12/2015 - 11:23

        Very unusual as what your broker described was exactly the process I had to follow - just have the funds in the everyday account.

        What are they advising you to do thats causing the hassle?

      • 

        mustard on 01/12/2015 - 11:28

        @tizey: They've asked me to deposit it into my solicitor's trust account for her to organise the cheques, which she doesn't operate. I've come to the conclusion that I will just need to transfer all my money out and write one single bank cheque to my solicitor (which will be easier with ANZ in terms of urgency). No one at ING seems to want to help!

        Thanks again for all of your help though :)

      • 

        donbot on 01/12/2015 - 11:50

        @mustard: Hrm ok. Sounds the same except your instigating the transfer to your solicitor as opposed to ING Direct doing it.

        Do what you're comfortable with - but why couldnt you just transfer direct to your solicitors trust account? SWIFT transfer might cost you $10, but its instant. With settlement on the 7th, dont want to have any cause of delay getting funds in the right spots.

      • 

        mustard on 01/12/2015 - 14:56

        @tizey: My solicitor says she doesn't operate a trust account (have no idea why). I decided rather than fight a losing battle I am just going to get a bank cheque issued via ANZ. I transferred all my money back out of ING today so hopefully it hits the ANZ account by Friday. The person on the ING end said it should transfer over within 24 hours.

        Haha this thread should become 'What not to do for your first settlement', but I guess you learn from your mistakes! Thanks so much again for your help.

• 

  mustard on 10/12/2015 - 19:25

  Hi all,

  An update. I ended up having to transfer all of my money out of my offset account and into ANZ to get a bank cheque written out and handed over to my solicitor.

  If I had to do it all again, I probably would have thought twice about going with ING. I just can't believe the amount of different answers I was getting and I hate to think what would have happened if I didn't follow up on what was happening with those funds.

  Not to mention, Gadens are probably the worst 'law' firm. They got my settlement date wrong - they had it down for the 12th (a whole week later) and, as a result, wouldn't reply to any of my solicitor's calls or emails. They also got my loan amount wrong, 1 day prior to settlement.

  All in all, I learnt a lot for my next settlement, if there ever is one! Thanks all for your help and words of advice!

  • 

    ozlab on 30/05/2016 - 11:06

    Agree. ING settlement is very complicated comparing to the big 4. They also require more paperwork. They use 3rd party solicitor Gadens and every communication is very slow if there's problem.