Financing
First of all, we must know what is meant by the Mortgage Distribution, which is the act by which the part of the credit for which the property is going to respond is fixed:
- Each property (inter partes or vis-à-vis third parties)
- Each of the properties when several properties are mortgaged at the same time as security for a single claim (original objective plurality).
- When the mortgaged property is divided in two or more
- Or when any part of it is segregated (supervening objective plurality).
When a house is bought off plan and the promoter has requested a loan with mortgage guarantee to a financial entity for the promotion and realized the Mortgage Distribution, it is habitual that the above mentioned loan contemplates the possibility that the future buyers are subrogated in the loan with mortgage guarantee that encumbers the properties to acquire by this one. The subrogation is not obligatory for the buyer and must be expressly accepted by the bank, which, in each case, will demand that the buyer meets certain requirements.
As an advantage, subrogation allows the buyer to save certain mortgage incorporation tax expenses.
Subrogation, as indicated in the previous section, allows the client to subrogate in the developer loan and the financing with a different entity. In case of opting for external financing, the client must look for the entity that interests him and constitute a mortgage loan, for which the financial entity will have to appraise the house plus the annexes and initiate the whole file to grant the loan, which is signed in a different deed at the same time of the purchase and sale. In the event that the client decides to seek external financing and not to subrogate, the seller will pay all the costs of the cancellation of the developer loan.
The purchase contract is signed between the developer and the buyer and it is the buyer’s responsibility to pay the full price, which may be paid with his own funds or by taking out a loan with a mortgage guarantee on the property. Therefore, the buyer is obliged to pay the price to the seller and it will not be a valid reason to cancel or terminate the contract if the buyer has not obtained financing for it, so that, in the event that the deed of sale is not executed for this reason , the buyer will lose the amounts paid as earnest money.
At the moment the developer obtains the approved CFO (Certificado Fin de Obra), the buyer is informed and it is indicated that, at that moment, he must begin to look for financing, either with the subrogation or with the entity that best suits his needs.
