Unlocking funds from your real estate loan at the notary

No payment to the borrower

No payment to the borrower

Know firstly that in any case, the settlement of the mortgage can not be made to your order. The bank will release the funds directly to the order of the notary if you buy an old home or send a payment to the developer if you buy a new home with each call for funds, in accordance with the reservation contract attached to the loan offer.

On the other hand, the disbursement of the funds is the fact triggering the payment of interest on the mortgage. It must intervene within 4 months after the signing of the prior offer.

Case of successive releases

Case of successive releases

If you plan to borrow to carry out work in your home or if you buy a new property (principal residence or rental investment), the release of funds will be done in a successive way. You will then have to pay the interim interest, that is to say the share of interest corresponding to the amount released by the bank.

Numerical example of fund calls

Numerical example of fund calls

Imagine that you borrow 200,000 euros to 4.5% for the purchase of a new apartment off-plan (sale in future state of completion) and that the disbursement is made according to the diagram below. (We simplified the calculation on the assumption that calls always took place on the 1st of a month). Just like a loan in fine, the borrower only pays interest until the last release.

January 1, 2012 Signature of the reservation contract 5% € 10,000
May 1, 2012 Opening of the site 20% 40 000 €
July 1, 2012 End of foundations 10% € 20,000
December 1, 2012 Floor 2nd floor 10% € 20,000
may 1st, 2013 Out of water 20% 40 000 €
August 1st 2013 Out of air 20% 40 000 €
1st October 2013 Completion of the works 10% € 20,000
December 1, 2013 Return the keys 5% € 10,000

Cost of interim interest

January 1, 2012 € 10,000 X 4.5% X 4/12 150 €
May 1, 2012 € 50,000 X 4.5% X 2/12 $ 1,125
July 1, 2012 € 70,000 X 4.5% X 4/12 € 1,050
December 1, 2012 € 90,000 X 4.5% X 5/12 € 1,687.50
may 1st, 2013 € 130,000 X 4.5% X 3/12 € 1462.50
August 1st 2013 € 170,000 X 4.5% X 2/12 $ 1275
1st October 2013 € 190,000 X 4.5% X 2/12 $ 1425
December 1, 2013 Amortization of capital

As can be seen from this example, interim interest is expensive for the borrower, who will have to pay out more than 8,000 euros before starting to depreciate the capital.

If you have a cash flow problem, you can ask the bank to incorporate the interim interest in the home loan. They will then be repaid over time and will not enter into the calculation of the debt ratio.

Attention in case of insurance delegation

Attention in case of insurance delegation

If you subscribe to the group contract, the bank will take care of the contract edition. On the other hand, if you opt for an external insurance, it is you who will have to make sure that everything is in order on the day of the disbursement and in particular to the edition of the delegation, the particular conditions and the definitive contract.