Signed between the seller and the buyer of the property, the sales agreement contains a mandatory suspensive clause, relating to obtaining the mortgage necessary for the purchase. A clause releasing the buyer from his commitment to the seller, in case of credit refusal.
In other words, the financial institution draws up a loan offer, respecting the wording imposed by law. Concretely, this results in the dissemination of certain information, the presence of mandatory legal notices and supporting documents to be included in the file.
What laws govern the establishment of a mortgage?
Home loans to individuals are subject to the “Scrivener” and “Scrivener 2” laws, dating from 1978 and 1979 respectively.
If they still remain in force, these provisions have been regularly amended, whether by the Lagarde law in 2010, by the Hamon law in 2014 and by the application in French law of European law relating to “consumer credit contracts, relating to real estate for residential use ”. Without forgetting the consumer code, which protects the consumer in terms of credit.
What does a loan offer contain?
If a bank can freely publish provisional documents or financing estimates, its loan offer must present the following information, in accordance with article L313-25 of the Consumer Code :
- The identity of the parties and sureties (names and addresses and company name)
- Information relating to the credit (nature, object, duration, rate, date of availability of funds, etc.). For fixed-rate loans, the amortization schedule. For variable rate loans, a note on the terms and conditions of the interest rate variation, an indicative simulation of the impact of a variation on the monthly payments, the duration and the total cost of the credit.
- The amount of the credit, its total cost, and its APR
- The required insurance and guarantees conditioning the conclusion of the credit
- Mention of the possibility of opting for a delegation of insurance
Since 1 October 2016, the bank or financial institution must also have a European Standardized Sheet (UNICEF), to facilitate the comparison of loan offers made by different organizations approached. In fact, it follows a formalized model with 15 points to be filled in (characteristics of the loan, conditions for early repayment, etc.)
What is its period of validity?
Made by the bank or financial institution, the loan offer is an official document, valid for 30 calendar days, from the date of receipt of the financing proposal by the borrower.
Note that it can only be accepted after a reflection period of 10 calendar days. After this mandatory period, it only remains to send it back signed by letter, to officially accept it.
At this stage, the loan offer can no longer be modified by the bank.
How is the loan offer set up?
After this signature, the borrower has a period of 4 months to buy his property. If the signing of the sales agreement cannot be made before this period, the loan offer may be extended at the request of the borrower, but the bank may refuse.
If the sale is canceled, the accepted loan related to this project must also be resolved. Concretely, this results in the return of the slip sent by the bank with the loan offer, by registered letter with acknowledgment of receipt.
If the sale is sealed, the bank sends the banker’s check directly to the notary, which corresponds to the amount of the loan if your property purchase is an existing property.
For a good under construction, the sums follow the progress of the works.