After you have read and understood the terms and conditions of a loan contract, you should ensure that you are fully protected before signing the loan offer. In most cases, the lenders still retain the highest power in the loan contract and they do so through the unilateral variation clause.
This clause is usually written in fine prints and it is upon the borrower to take keen review of the proposed changes in the unilateral variation clause. The clause contains information which stipulates that lenders have the right to change any terms and conditions at any time without giving you a notice. Most lenders tend to increase the interest rates while others can call in the loan at any given time.
Tips on how to fully understand your loan contract
- Ensure you engage a solicitor or conveyance to go through the loan contract
- Engage a finance broker who has experience in the industry so as to get the best product
- If you are a first homebuyer, ensure that you have completed the First Home Owner Grant application with a legal entity
- Counter check all the documents to ensure everything is clear
- Ensure you have noted the interest rates and product match you had previously agreed on with your broker.
- Ensure you have better understood the term and conditions booklet to know your rights as a borrower
- Confirm that you have your home insurance cover ready and you should ensure that you have returned it back when you will be handing back the mortgage contract to your lender
- Check everything to ensure there is no error and then sign it time to avoid last minute rush.
- Always ensure that you have understood the terms and conditions of your loan contract and if there is any area that you fill it is not clear, ask in time.