Settlement day is the day you finally take ownership of your new home. A lot happens behind the scenes for your settlement. This is our guide:
What is the settlement?
The word settlement is the legal term for what happens when the vendor/seller hands over ownership of the property to the buyer. Your solicitor or conveyancer will be your representative for the settlement. This process happens whether you are purchasing a property with cash or using a mortgage for the payment.
Remember that you need to do your final inspections of the property before settling.
Your settlement day
Upon signing a contract of sale for the purchase of the new property, the buyer will pay a deposit as part of the conditions of the contract of sale. These funds are deposited into the seller’s solicitors/conveyancers trust account. Before settlement your legal representative will check that the sellers of the property have fulfilled all the clauses in the contract.
On settlement day, your legal representative will give the seller’s solicitor the balance of what you owe on the property for the exchange. The title of the property will now change from the seller to the buyer’s name(s) through the property title deed. This is done where the buyer is purchasing the property for cash.
If a mortgage is involved, a representative from the lender will attend the settlement to hand over the funds of the purchase. If the seller also has a mortgage, a representative from their lender will also be present at settlement.
Your solicitor or conveyancer upon settlement will ensure any mortgage from the previous owner is removed from the title and they will ensure you are the legal owner of the property.
When settlement has been completed your legal representative will contact you to say that you are now entitled to pick up the keys for the property. You will then contact the real estate you purchase the property through to have the keys collected.
If you have a mortgage you will now start making repayments on your home loan. This could be weekly, fortnightly or monthly depending on how your repayments are structured.
Your legal representative will provide a summary of what was paid and to who it was paid for your records.
Remember your mortgage broker is here to answer any of your questions throughout the whole home loan process.