11.05.2023 – 12:21h Updated 11.05.2023 – 12:21 p.m.
Have you gone to take out a mortgage and the bank has asked you for an advance? This ‘advance’ money is what is known as the pre-signature provision of funds for the mortgage. A kind of piggy bank that the client has to give to the bank to start managing some procedures and pay for certain procedures related to the loan. But how much money can the bank ask for? And what happens if there is money left over from that advance?
Information content:
What is the provision of funds of the mortgage
The provision of funds prior to signing a mortgage is a amount of money that the future mortgagee must advance to the bank to cover certain expenses, as explained by the Bank of Spain. It is a kind of mattress or piggy bank that the buyer of a home has to offer the bank to assume certain costs related to registrations and other items associated with contracting a mortgage.
How much money can the funding bank ask for?
The amount of the provision of funds, after the approval and entry into force of the Real Estate Credit Law, has been significantly reduced, as explained by the Bank of Spain. Change that is due to the fact that, with the new norm, the client is only obliged to pay both the appraisal of the property and the copy of the deed.
However, when calculating this item, the banks tend to raise the accounts to make sure that the client will have enough money to carry out the entire process.
For this reason, it is recommended to avoid paying more to the banks is to review and check the accounts separately. To guarantee that the amount requested by the entity is in accordance with the forecasts initially made.
Term for repayment of the money in advance that has been left over
Additionally, the bank is required to offer a proof of the settlement made and the bills for expenses that have been paid with the money advanced by the client.
Once all the items have been checked, the entity must repay the income that has been left over from that advance in a set period. Time that depends on each bank, although it must be adjusted to certain deadlines. In the case of delay, the client must claim the return of that money so that it is not lost along the way.
If you want to read more news like What is the provision of funds prior to signing a mortgage and what is it for?we recommend that you enter the category of Mortgages.
2023-05-11 11:30:12
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