PEXA electronic settlement for borrowers

What electronic settlement replaced

Not long ago, property settlements involved representatives of buyers, sellers and lenders meeting in a settlement room with paper documents and bank cheques. Any missing cheque or signature meant rescheduling. Registration of the new mortgage or transfer happened days later, after documents were physically lodged with the land titles office.

Electronic conveyancing changed this. Today, most property transactions in Australia settle through an electronic lodgement network. PEXA is the largest operator. Instead of meeting in person, every party works in a shared digital workspace, and funds and title changes happen together at the agreed time.

How it works for a secured loan

When a private lender advances a secured business loan, the lender’s lawyer opens or joins a workspace for the property. Depending on the transaction, the workspace may include:

• Discharge of an existing mortgage that is being refinanced
• Registration of the new lender’s mortgage, or lodgement of a caveat
• Transfer of title if the loan funds a purchase
• Payment of settlement funds to the seller, the outgoing lender, the ATO or other creditors

Each party signs its documents digitally in advance. At the settlement time, the platform confirms everything is ready, moves the funds between bank accounts and lodges the documents with the relevant land registry.

What you need to do as a borrower

Your lawyer or conveyancer handles the workspace, but you play a vital part:

Verification of identity. Lenders and representatives must verify who you are. This usually involves an in-person or video check with original identification. Do this early.

Signing loan documents. You sign the loan agreement, mortgage, guarantees and any other documents. Your representative then signs the electronic mortgage in the workspace on your behalf, under a client authorisation you provide.

Providing information. Bank account details for any surplus funds, payout letters for debts being cleared and any other information your lawyer requests.

Being available. On settlement day, make sure you can answer calls in case a question arises.

Why settlements still get delayed

Electronic settlement reduces many risks, but it does not remove them. Common causes of delay include:

• Late payout figures. If an existing loan is being refinanced, the outgoing lender must provide a payout figure and be ready to discharge. Some lenders are slow, so request figures early.
• Incomplete verification. Identity checks or client authorisations not finished in time.
• Unsigned documents. A guarantor or co-owner who has not signed.
• Title issues. An unexpected caveat, writ or other registered interest found on a late title search.
• Funding issues. A lender not having completed its approval conditions.
• Platform cut-off times. Settlements need to occur within business hours, and late changes may push settlement to the next day.

The settlement checklist helps you track the items that most often hold things up.

Settling a caveat loan

Caveat loans are often chosen for speed. In most states, caveats can be lodged electronically, and some caveat loans settle without a full workspace when no other dealings are involved. The lender may advance funds once the caveat is lodged and its priority is confirmed. Later, if the loan runs longer, the caveat can be replaced by a registered second mortgage.

Settling a purchase with a bridging loan

If a bridging loan is funding all or part of a property purchase, the workspace will include the seller’s representatives, the buyer’s representatives, the incoming lender and possibly the buyer’s other lenders. Everyone must be ready on the contract settlement date. If your bank reduced its loan at the last minute and a private lender is filling the gap, see our guide on what to do when settlement is days away.

Where the money goes

One advantage of electronic settlement is clarity. The workspace shows exactly where every dollar goes: to the outgoing lender, to the seller, to the ATO, to the borrower’s account and to fees. Ask your lawyer for a settlement statement before the day so you can check it matches what you expect.

State differences

Each state and territory runs its own land registry, such as NSW Land Registry Services, Titles Queensland and Landgate in Western Australia. Electronic lodgement is widespread, but some forms and requirements differ. Your lawyer will know the local rules.

Illustrative example

A company refinances a maturing private loan with a new lender. The new lender’s lawyer opens a workspace and invites the outgoing lender’s lawyer. The borrower completes identity verification by video and signs documents electronically. The outgoing lender provides a payout figure three days before settlement. At the agreed time, the platform pays out the old loan, discharges its mortgage, registers the new mortgage and pays the small balance to the borrower’s account, all within minutes.

This example is illustrative only.

Questions to ask your lawyer

Ask who is opening the workspace, which parties still need to join, whether all payout figures have been received, when your verification needs to be completed and whether the title has been searched recently. A short weekly check-in in the lead-up to settlement often catches problems while there is still time to fix them.

Getting started

If you need a secured loan to settle a purchase or refinance, check your eligibility with no credit check. Tell us your settlement date and we will explain the steps that need to happen before it.

Start your enquiry to get things moving.