Mortgage basics · Checklist
Mortgage financing condition: the four figures that protect you, and how to set them
Drafted before the bank has spoken, the clause decides everything if the loan is refused: the four figures to include, how to set them, the wording to add.
Four figures form the protection of a mortgage financing condition: the maximum amount of the loan or loans, the maximum term, the maximum interest rate, and the deadline. The amount covers the complete funding plan with a margin, the term is the one actually requested, the rate remains credible and specifies its nature, and the deadline is calculated in reverse. Everything is set before the signature: afterwards, the seller's agreement is required.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- The financing clause is drafted before the bank has examined the file, often based on a pre-printed template and figures declared orally.
- Four figures decide everything: the maximum amount of the loan or loans, the maximum term, the maximum interest rate, and the deadline.
- When the deed mentions financing by loan, the financing condition applies by right and protects any sum paid in advance.
- A maximum interest rate ceiling set voluntarily too low exposes you to the condition being deemed fulfilled due to the fault of the purchaser themselves.
- The clause only protects the person who complies with it: requesting a loan different from what it describes, or submitting the application late, neutralises it.
When drafted correctly, the loan conditional clause releases you from the preliminary sale agreement and returns every sum you have paid if the loan is refused. Everything is settled before the signature: here is the list to bring, drawn from the fundamentals of mortgage credit.
Read the clause again before signing
The estate agency or the solicitor drafts it using a standard template, before the bank has seen your file. After the signature, its figures can only be changed by addendum, with the seller’s agreement.
- Request the draft deed in advance: twenty-four hours are sufficient.
- Have it corrected before signing: afterwards, the seller has no reason to accept changes.
Your legal protection
If the price is paid, even in part, by a loan, the deed is concluded subject to the condition of obtaining that loan, without you having to request it. If the condition is not met, any sum paid is immediately and fully refundable to you, without any deduction or compensation on any grounds.
C'est un PLANCHER, pas une durée usuelle. La loi interdit de descendre en dessous ; en pratique, les compromis stipulent une durée nettement plus longue, et rien n'empêche les parties de l'allonger encore. Le point de départ est la signature de l'acte, ou son enregistrement lorsque l'acte sous seing privé y est soumis à peine de nullité.
- En vigueur depuis le
- Source
- Article L. 313-41 du code de la consommation — Légifrance
You lose it only by waiving it, by a statement copied out in your own hand. Are you asked to copy out a statement? Stop.
The four figures to fix
The right figures are those of your file.
① The maximum amount
Request more than the written amount, and a refusal will not trigger the clause. Start from the full plan (price, fees, guarantee, works, minus the contribution) and add a margin: it is a ceiling, not an obligation to borrow. Several loans (zero rate, employer loan)? Have it written as “the loan or loans”.
② The maximum term
Write the term that you will actually request, within the maturity that a lender can grant (the standards of the High Council). A clause outside the standards is unachievable.
③ The maximum rate
Above it, the loan is deemed not obtained. Place it slightly above the observed rates: credible protects better than generous. Deliberately too low, the condition is deemed fulfilled (Article 1304-3 of the Civil Code). Have it specified which rate: nominal or total effective rate, with or without insurance.
④ The deadline
Calculate it in reverse:
- Complete file submitted: the documents to provide, the submission.
- Assessment: weeks, not days.
- Agreement in principle: it does not amount to obtaining the loan.
- Offer received: the first document that binds.
- Reflection period, during which you cannot accept.
- Délai de réflexion de l'emprunteur 10 jours
- Maintien minimal des conditions de l'offre 30 jours
Deux durées distinctes dans le même article du code de la consommation. La première est un délai de réflexion incompressible : l'acceptation ne peut pas intervenir avant son terme, la réception comptant comme premier jour. La seconde oblige le prêteur à maintenir les conditions de son offre. Aucune des deux ne se raccourcit par accord des parties.
- En vigueur depuis le
- Source
- Article L. 313-34 du code de la consommation — Légifrance
Add a margin for a second submission. Details: the reflection period and the calendar of a sale.
Four phrases that strengthen the clause
- The scope: the loan or loans, a refusal of a single one being sufficient.
- The notification: to whom (the drafter of the deed), how, when.
- What constitutes a refusal: number of applications and content of the certificate.
- The extension: by written addendum.
Right of withdrawal and suspensive condition: two distinct deadlines
| Right of withdrawal | Suspensive condition of loan | |
|---|---|---|
| What it allows | To renounce without reason | To withdraw if the loan is not obtained |
| Who benefits | The non-professional purchaser | The purchaser financing by credit |
| Starting point | The day following the notification of the deed | The signature, or the registration of the deed |
| What must be done | Nothing to justify | Justify the refusal, in the forms of the clause |
| What remains due | Nothing | Nothing, if the clause has operated |
Il court à compter du lendemain de la première présentation de la lettre notifiant l'acte — pas du jour de la signature, ni du jour de la réception effective. Lorsque l'acte est remis en main propre par un professionnel mandaté, le délai court à compter du lendemain de la remise.
- En vigueur depuis le
- Source
- Article L. 271-1 du code de la construction et de l’habitation — Légifrance
Errors that invalidate the clause
- Requesting something else than what it provides for: the refusal serves no purpose.
- Submitting late: submitting early is part of the proof.
- Not notifying the refusal.
- Blocking yourself: missing documents, a conforming offer refused.
Loan refused? Read the loan refused after the preliminary sale agreement. Align these figures with your plan: a call, the draft deed in hand.
Create your file before signing the preliminary sale agreement.
Sources
Read next
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