contracts with no loan clause

[Bronte]

Due to reading AAM could someone clarify for me is it now standard for contracts to not have a loan clause (mortgage clause) in them anymore. I left Ireland in 1995 and today someone referred to this not being standard since 1997. Before I left I never heard of such a thing. You always had to have this clause if someone was getting a mortgage.

If this is now standard how can a buyer sign a contract to buy something as substantial as a house to be built in the future and their circumstances could change and the mortgage offer could be withdrawn by the bank due to unaffordability. When I got my first mortgage offer it had to be signed and returned to the lender but the offer only lasted 3 months (might have been 6 months) and if the money wasn't drawn down it had to be extended or it expired and if not extended/renewed there was no contract with the vendor.

Surely this is a very risky situation for buyers to be in?

 

[Hel_n]

A buyer does not have to have a loan offer in place to sign contracts but it is recommended that they do because they are at risk of losing their deposit (up to 10% of pp) if they fail to secure a loan offer. Few buyers are foolish enough to sign contracts and hand over a deposit without having formal loan approval in place first.

 

[mf1]

OP has a very interesting point. At a time where there was no rampant house price inflation, it was reasonably likely that a borrowers financial circumstances would probably not differ very much or even significantly imrove from date of signing the contracts to completing the transaction anything up to 18-24 months later when they needed to draw down the loan.

Now that people are borrowing so heavily and the market is uncertain should they be able to withdraw from a contract if their circumstances change? Would purchasers use this as a ploy if they simply changed their minds? Or should they just not buy a house? And should builders be lumbered with a property that now no-one else may want to buy?

Its all ahead of us.

mf