From Oi Realtor we want to tell you what the provision of mortgage funds is all regarding and why the bank might return money to you. Continue reading the article to find out.
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You’ve probably heard of mortgage underwriting, howeverit is common for people to be unclear regarding what it is, especially if they have not yet signed a mortgage contract. If you have previously signed, it may sound a little more to you. in the next article We will tell you everything you need to know regarding the provision of mortgage funds.
It is known that To acquire a property with a mortgage, we must have savings that represent 20% of the value of the home. This is because the bank will will grant only 80%. However, you should keep in mind that to this 20% you should add approximately 10%. The purpose of this extra 10% is meet the expenses of buying and selling the home and signing the mortgage loan. Here we will explain how the bank calculates this amount and what the mortgage law says regarding the provision of mortgage funds.
Provision of mortgage funds
The provision of mortgage funds is a sum of money that the bank requests in advance to pay for the services that they are going to provide us. The bank, by giving us a mortgage, It will estimate what are the expenses that we must face to finalize the sale of the property. As mentioned above, usually It is around 10% of the total value of the mortgaged property, an amount that we must have saved.
The bank will ask the customer to enter a sum of money in the account. This will serve to deal with all the expenses that are generated with the sale and adequately settle the initial expenses of the operation.
What does the value of the provision of funds include?
Here we will tell you what are the expenses included in the provision of funds:
Property appraisal
It is a evaluation to be carried out by a specialized technician. This will let you know what is the value of the property. Generally, the appraisal It will be one of the expenses that are included in the provision of mortgage funds.
Mortgage credit expenses
Also included are opening expenses of the mortgage loan and commissions of the operation. It is necessary to take into account, prior to signing, How much do these expenses rise to be able to compare adequately.
VAT or ITP
If the property you are going to acquire is secondhandYou will have to pay the Property Transfer Tax (ITP). On the other hand, if it is a construction of new construction, the tax you must pay will be VAT.
Expenses linked to the Land Registry
This is a procedure that is essential for the change of name and ownership of the property. The house is written approximately 6 or 8% of the value of the property.
Notary fees
Notary services have a Approximate value, between 600 and 875 euros. may vary depending on the value of the house. The task of the notary is draft the contract of sale so that it complies in accordance with current law.
Management fees
It is usual for the bank to provide an agency to process the operation and ensure that the taxes are paid in a timely manner.
Tax on Documented Legal Acts
We are talking regarding a tax. regional character. Currently, they are the banks who must deal with this expense in the sale of a property.
After the Supreme Court has considered null, abusive, various expenses that until now had to be paid by the client, the The bank must pay for the notarial fees, the registry, the agency or the IAJD. The client should only be responsible for paying the appraisal of the property. For this reason, today the value of the provision of funds is lower, since one of the highest expenses, the IAJD, is no longer the responsibility of the client.
What amount might the bank return from the provision of funds?
The bank is responsible for calculate upwards the value of the provision of funds. Once the sums of the mentioned services have been paid, the rest will have to be settled by the bank. The banking entity it might take a few months to manage the liquidation of the provision of funds. On the other hand, the amount that might be returned to you It will vary depending on whether the bank’s calculation was adjusted or higher than what you really had to pay.
The bank must deal with deliver the invoices and supporting documents for each of the charges made and settle the remaining amount. you will have to check that the value is related to the surplus and accept the settlement. In this way, the bank will be able to enter it back into your account. This amount corresponds to you, so the bank will not be able to keep the surplus of the provision of funds.
Prior to June 16, 2019, banking entities were charging more than they should to its clients for the granting of a mortgage. It is for this reason that, If you have signed prior to that date, you can request the costs of registration, management, appraisal and half of those of the notary. In case you require the bank to return the expenses, you must collect all the invoices and make a claim to the Customer Service of your bank. On the other hand, you can also present yourself before the court of abusive clauses of your province.
After reading this article, we are very interested in knowing what your opinion is regarding the provision of mortgage funds. If you are interested in sharing it with us, you can do so in the “Comments” section of our Blog.
If you find yourself in a situation that you cannot solve on your own, do not hesitate to go to Oi Realtor. A team of professionals will be at your disposal and will help you throughout the process. We are waiting for you!
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