Choose a Long Term for Your Loan

When purchasing a property with financing, it’s essential to carefully consider the loan’s conditional period. This “suspensive condition” states that the sale will proceed only if your loan is approved. But what term should you choose to maximize your chance of a successful loan application?

The Importance of the Suspensive Condition

The suspensive condition is a crucial part of the buying process. It allows you, as the buyer, to cancel the purchase if you’re unable to obtain a loan. To activate this condition, you must provide proof within a specified period from the bank showing that your loan application was declined. Without this proof, the sale becomes final—even if the loan is eventually denied.

Short Term vs. Long Term

Sellers often favor a short period to quickly confirm the feasibility of the sale. Standard terms range between two and three weeks. However, as a buyer, it’s advisable to negotiate for a longer period, such as one month. A longer term offers you more time to secure financing and provides greater assurance.

What to Do if the Term is Too Short

If the agreed period proves too short, perhaps because the bank needs more time to process your application, you may request an extension from the seller. If the seller declines, it’s wise to urge your bank to expedite its decision. In cases where the term seems “unreasonable,” you could even take the matter to court to contest it. However, note that this approach’s success is uncertain and thus not guaranteed.

The Advantages of a Long Term

A longer period for the suspensive condition provides peace of mind and increases your chances of a positive loan decision. Additionally, a longer term allows you, as the buyer, the opportunity to seek offers from multiple banks and compare loan options. This not only improves your likelihood of securing financing but also enables you to negotiate better terms.

Conclusion: Choose a Longer Term for Maximum Security

In property purchases, choosing the term for the suspensive condition is critical. While sellers often prefer a shorter period, it’s in your best interest as the buyer to negotiate for a longer term. This maximizes your chances of securing a loan and allows you to move forward with the purchase confidently.