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The condition precedent of obtaining a loan or how to ensure the security of the buyer.

Have you signed a purchase agreement for your main, secondary or rental residence and need a mortgage to finance it? The sales agreement must therefore mention a suspensive clause for obtaining a loan. For this, your notary or real estate agent asks you for information concerning the loan that you are going to apply for but you do not know what to answer them?

No worries, we explain very simply in the rest of the article what is really used the condition precedent of obtaining a loan, and how to fill it to favor your interests rather than those of the seller.

The condition precedent of obtaining a loan was created to ensure the security of the buyer. You just have to fill it out.

Released, delivered … The buyer is secure!

Released, delivered ... The buyer is secure!

All real estate sales are carried out in two stages:

  • The first step is the signing of a preliminary contract (compromise, reservation contract or promise to sell);
  • The second step is the signing of the final deed of sale at the notary, which makes you become the owner.

At the preliminary contract stage, it is rare for the buyer to have the funds necessary to acquire the property of his dreams. The legislator, grand prince, decided to protect him from the seller when his purchase depends on obtaining his mortgage.

In this case only, the inclusion in the sales agreement of a suspensive clause for obtaining a loan is compulsory. It will thus allow the purchaser to be able to renounce the acquisition without penalty because the non-fulfillment of the suspensive condition renders the preliminary contract void.

The suspensive clause of obtaining a mortgage therefore protects the purchaser who, if he cannot obtain the mortgage necessary to finalize the sale, has no risk of losing the immobilization indemnity or the receiver , which must automatically be returned by the notary.

But under what conditions?

But under what conditions?

If the suspensive clause of obtaining a loan protects the purchaser, it is still necessary to respect certain conditions so that he can give up his purchase for free. It would be too easy otherwise ?

Explanations.

The suspensive clause of obtaining a loan mentions the main characteristics of the loan that the buyer will have to request , namely:

  • the amount of the loan;
  • the interest rate ;
  • the term of the loan;
  • a completion deadline.

This information must be considered very carefully for the purchaser who signs his compromise. Because it is if and only if the purchaser does not manage to obtain the conditions mentioned in the compromise within the time limit that he can retract for free.

Therefore, if the buyer does not manage to obtain his loan or obtains a loan on less advantageous terms than what is indicated in the compromise, he will have the capacity to abandon his acquisition without penalty. However, he must provide proof of having consulted several banking establishments (at least 2 in most cases).

Conversely, if he obtains better conditions than what is written in the suspensive clause of obtaining a loan, he will be bound to the seller and will have to regularize the final sale. He will not be able to retract.

You will understand, the seller’s interest is to mention the requested loan rate as high as possible to secure his sale as much as possible. And for the buyer, it is the opposite.

The law requires the purchaser to do everything to obtain his loan on the conditions indicated within a time limit, which must be at least one month. Rest assured, getting a mortgage in one month is clearly impossible given today’s banking deadlines ?

This is why the deadline entered in the condition precedent was extended by real estate practitioners to be brought today to 45 days or 60 days. Again, this period is important for the buyer who must build his file, deposit it in the bank, obtain a loan agreement and then his loan offers within the time limit!

Advice from a friend and a mortgage expert: from the creation of a loan file, it takes about 1 and a half months to obtain a loan offer when a loan request is managed by an expert mortgage. Mentioning 60 days to obtain credit in the suspensive clause of obtaining a loan is therefore not too much!

As you can see, the drafting of the suspensive clause for obtaining credit should not be neglected. It is a key element still too little known by buyers to date !!

What is the Amortization Plan? – Personal loan

The personal loan contracts include the amortization schedule among the essential attachments. This document indicates: the total number of installments to be repaid, the payment due date, the total installment amount, the principal and interest. In Italy, the French model is used to calculate an amortization schedule. This means that the share of interest due to the financial company or bank that granted the loan will be higher in the first installments. As the customer repays the individual installments.

The interest portion will decrease and proportionally increase the principal portion.

The interest portion will decrease and proportionally increase the principal portion.

This means that the client will repay most of the interest expense owed to the bank or financial institution in the first half of the amortization plan. It follows that a possible early repayment of the loan at the end of the amortization will not allow the customer to save on interest expense, since in large part already repaid.

An Italian amortization plan, on the other hand, would provide for a repayment of interest and principal in a constant and balanced way. This determines a significant advantage since from the first installments the capital portion to be returned to the lending institution would be reduced or less interest expense.

The calculation of the interest envisaged in the amortization plan must respect the limits of usury threshold rates.

money loan

If this is not respected, the loan agreement would be void. Each quarter, the MoveLife Bank publishes a document relating to the average global effective rates and a list of usury threshold rates to be respected.

In assessing the conditions to be offered to the customer. The updating of these data is quarterly and the lending institution will have to draw up the amortization plan based on the loan disbursement date and not on the resolution of the loan request.

The financial or bank must scrupulously comply with the information communicated

For example, if Liam Hunter requested a personal loan on 28 March 2012 and the contract was approved on the same day, the rates to refer to would be those of the first quarter of 2012. But if the contracts were printed on 01 April 2012, the lender should check whether the rate X applied to the contract always respects the maximum anti-usury threshold limits. If not, the loan should be re-released with the new conditions.

Thanks to the amortization plan, it will be possible to check the residual debt amount to be repaid to the financial or bank month by month.

Home Renovation Loan

Being able to access financing for the restoration or expansion of one’s home is now a frequent phenomenon. Renovating the bathroom, the flooring, the heating system and much more are all initiatives that involve the owners of a first or second home, but also those who live in a rental therefore do not own it.

If not combined with the purchase plus restructuring, applying for this loan is simple; no estimates of the building renovation works are required, nor can it prove the actual purchase or payment of the company.

But which one to choose? In addition to the economic conditions, how best to proceed with the loan application? If you want to evaluate the restructuring in installments, before taking action, carefully examine your situation.

Let’s analyze the three possible combinations.

 

Purchase and renovation

Purchase and renovation

When you decide to buy a house, many times you want to improve the division of environments, modernize the property, perform works and renovations. Pairing a mortgage (for purchase) and a loan (for restructuring) is recommended only if the institution that will provide both loans is the same.

For example, if Mando requests the first home loan from PocketSavers Bank and, after obtaining the resolution, the loan to Findomestic may not complete the purchase and sale of the property.

Why? Both requests for money are reported to the credit systems (such as Crif) and there may be the case in which the bank, before proceeding with the stipulation on the day of the notarial deed, performs a new check in the databases.

If there are negative reports (late payment installments of other commitments) or recent requests or even approvals or disbursements of other loans (the case of Mando), the institution may cancel the approval of the loan as the economic conditions of the customer.

What to do? We recommend proceeding in two ways:

  • request the purchase and restructuring loan directly from the same institution;
  • if you are not willing to grant a higher sum than just the purchase, evaluate a loan by transferring the fifth or delegation of payment

For more details about this opportunity, contact one of our consultants via the quote request form.

 

Loan for restructuring with mortgage in progress

Loan for restructuring with mortgage in progress

The bank has already paid the mortgage, so there is no risk seen in the previous point. Now the chances of success are related to:

  • be regular in the database, therefore registered as good payers
  • perceived income which must be large to guarantee a minimum subsistence income (net of mortgage and loan installments, a reasonable monthly sum must remain with the customer. Indicative figure approximately 750 dollar per month)

In case of difficulty, contact one of our experts. Nica, for example, approached us a year ago; he wanted to renovate his apartment and the construction company, with only 15,000 dollars, would have restored the property and met its expectations.

Unfortunately, due to some late installment of Savers Free Bank loan, Nica had not managed to obtain the sum necessary to complete the works. He contacted us and in just 20 days, through a paycheck loan, Nica obtained the money for the modernization works.

 

Loan to renovate the house with no other commitments

Loan to renovate the house with no other commitments

This is the simplest condition, there are no particular reasons why the applicant may encounter difficulties in accessing credit. What could be the obstacles then?

  • uncensored, the client never obtained any other financing
  • there are not positive reports in the credit systems (delays or defaults on mortgages or past loans)
  • insufficient monthly income (less than 750 dollars per month)

Even in these cases, contact one of our experts for a free and no-obligation consultation.

 

Financing for restructuring

Financing for restructuring

Our role is to find the best offer, get in touch with the bank and follow you until the loan is disbursed. We do not disburse money, we put the customer in contact with a bank or financial partner. In this way you can take advantage of a wide range of opportunities and benefit from 24/7 support.

How to do? Easy, fill in the quote request form and within a few minutes you will receive our call. You will be assigned a consultant and in the event that our conditions meet your expectations, you will arrange an appointment directly at your home. The request is free and without obligation.

Where are you? The headquarters of the company is Rogelio Analita, but we are active throughout the national territory with a network of collaborators, also in your city.

Do I have to pay you expenses? You don’t have to pay us anything, neither for the investigation, nor expenses for the practical closure in case of success.

Are you interested in a loan for building renovation? Contact us now!

What is a dry bridge loan?

You own a property and you want to buy a new one. Or you have just found the property of your dreams and have not yet had the time to sell your current property. The problem is that you are not able to repay both your current property and your new property.

Take out bridge loan

In this case, you have the option of taking out something called a bridge loan.

This loan will finance part of your new property while you sell your current property. It is an advance operated by the bank, which is equivalent to 60 to 80% of the total amount of the sale of your current property.

The dry bridge loan allows you to transform your real estate assets into future contributions

For security reasons, the bank does not have the possibility to advance you 100% of the total amount of the transfer, it is too big a risk for it. In addition, she will send a real estate expert to correctly assess the amount of your property for sale.

Depending on the situation, there are two types of bridge loan: the dry bridge loan and the associated bridge loan (sometimes also called back-to-back bridge loan). Let us first take a look at the dry bridge loan.

The dry bridge loan: how to subscribe and its advantages?

The dry bridge loan: how to subscribe and its advantages?

The dry bridge loan is taken out by the borrower if the sale of his current property makes it possible to finance his new real estate project. Therefore, no additional loan is needed and this bridging loan remains the only loan in the financing plan .

This dry bridge loan is often used by seniors. Indeed, seniors often have finished repaying the credit of their property and have enough savings to not have to ask for an additional loan. That is to say that the amount collected for the sale of their property, in addition to their savings, allows them to fully finance their new property.

The dry bridge loan makes it possible to advance funds to the buyer for his new purchase, over a period of twelve months (renewable once).

There are two ways for the borrower to repay his bank:

  • the capital and interest due will be reimbursed once the sale of the current asset has been made;
  • interest is first reimbursed once the bridge loan is contracted and the capital will be reimbursed once the sale of the property has been made. This second repayment option is the least expensive.

In addition, the borrower will therefore have no prepayment penalties.

The dry bridge loan helps you in the event of a shortage of cash between the sale of your current property and the purchase of your new property. However, this bridge loan is expensive. The interest rate applied is high and the monthly payments are calculated on all the capital borrowed from the bank.

TO REMEMBER !

  1. Use the dry relay loan if you are an owner and want to buy a new property
  2. The bridge loan will finance part of your property while your current property is sold
  3. The amount of the dry bridging loan is fixed according to the value of your property