What if the buyer does not get his credit on time?
Summary
- How long does it take to get a response to a loan application?
- What is the deadline for accepting the mortgage offer?
- What are the conditions precedent of a mortgage?
- What to do if the mortgage is refused ?
- What if the buyer does not get his credit on time?
When acquiring a property, it is necessary to consider a deadline for the success of the real estate project.
Generally, it takes 45 days from the signing of the sales agreement to obtain a mortgage contract.
Lending agencies do not have the same processing times and therefore do not have the same response time. The time to obtain a credit offer can be up to more than two months.
How long does it take to get a response to a loan application?
The loan offer includes all the elements established between the borrower and the lending institution, it is a contract valid for 30 days once received made :
- Capital obtained
- Duration of the loan
- Real estate rates
What is the deadline for accepting the mortgage offer?
Once receiving the loan offer, the borrower has 10 days to think and retract. From the 11th day, the documents must be signed and returned.
Without the acceptance of the borrower, no payment from the organization can be made. As soon as the loan offer is signed and the document is returned to the bank, it will take 1 to 2 months to go to the notary.
After the appointment with the notary and the acquisition of the keys, the property officially returns to the owner.
Useful links :
> The role of the notary
> Withdrawal period after a signed sales agreement
> Why add a list of furniture to the sales agreement?
> What is the time limit between a sales agreement and the authentic instrument?
If the mortgage is refused by the bank, the sales agreement is cancelled. It will be necessary to provide the seller with proof of the refusal of the lending institutions. Without justification, the future buyer risks financial penalties included in the compromise.
The buyer of a home who does not obtain the loan recovers the provision unless the seller proves that the buyer is responsible for abandoning the sale.
What if the buyer does not get his credit on time?
It is possible to:
- Request an extension of the conditions precedent, subject to proof that the necessary steps are underway. It is possible to use the bank's agreement in principle as proof. The future buyer must notify the notary and inform him of the extension of the suspensive periods so that he can contact the seller.
- Prove your good faith : the delay in the loan offer is very often due to longer processing times. It is enough to inform the owner as well as the notary. It is preferable to send a registered letter with an acknowledgment of receipt.
> If the bank does not respond to the request, it is possible to contact the mediator of the banking institution.
> If the bank still does not respond, it is possible to go to court.
What are the conditions precedent of a mortgage?
Conditions precedent are conditions appearing on the promise of sale. This condition imposes a limit between the buyer and the seller and protects the borrower by giving him the opportunity to retract a real estate purchase if he does not obtain the desired credit.
If the future buyer does not obtain the credit, he can refuse his purchase without any additional cost if the deadline is respected.
> What is the difference between the offer to purchase, the promise to sell and the sales agreement?
- When acquiring a property, it is necessary to consider a deadline for the success of the real estate project.
- The buyer has a period of 45 to 60 days. At the end of the period, if no loan offer has been received, it is possible to cancel the sale without paying damages to the owner.
- If the buyer does not obtain his credit on time, it is possible to: ask to extend the conditions precedent and prove his good faith
- Conditions precedent are conditions appearing on the promise of sale. This condition imposes a limit between the buyer and the seller and protects the borrower by giving him the opportunity to retract a real estate purchase if he does not obtain the desired credit.
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Posted on 05/05/2023 by
Andy LECUYER
