What happens if you don’t use your approved mortgage loan?

If you have a pre-approved mortgage and do not find a suitable property, or if the seller withdraws from the sale, you will lose both the loan and the fees.

Pre-approved loan

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Good Finance will approve the mortgage in advance as part of a competitive struggle, even though they have not yet selected the apartment they want to buy. A pre-approved loan can usually be used from three months to a year and a half. But they have to watch out for deadlines.

Good Finance usually has two periods. The first is a period of so-called specification , when a client has to choose a property and buy it or start to renovate. This usually takes up to six months.

Then comes the loan period , which lasts up to a year and a half. Finally, this period can be extended from year to year and a half, but only during reconstruction, not when buying.

Amendment to the loan agreement

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The client of this Good Finance has six months to choose the property from signing the loan contract. Subsequently, it must provide documentation for the preparation of the amendment to the loan agreement and other contracts (lien agreement, petition for deposit of lien).

“ In the meantime, if the seller withdraws from the sale, the client may choose another property with the time to select it, but will pay a fee of USD 150 for the second specification. The time cannot be extended, ” adds Jessica Brown, GFIC spokeswoman.

At GFI, a client who applied for a mortgage certificate , Good Finance’s free mortgage promise, has only three months to look for a suitable property. “If the certificate has not been used by the time or the purchase of the property has not been realized, its validity will expire,” explains Angelika Farkašová, head of the GFI loan department.

If you have also signed a loan contract at the time, you have the option to withdraw from the contract within 14 calendar days under the Housing Loan Act. You must notify the Bank in writing of your withdrawal.

If you miss a two-week withdrawal period, you still have the option not to use the loan. “In the event that no drawdown has been made, the client pays no additional fee for the non-drawdown of the loan, ” says Sean Cole.

Withdraw even after pumping

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You are entitled to withdraw from the contract even if you have already taken the loan. You are only obliged to return the amount of the loan and interest for the period from the date of drawing the loan to the date of repayment of the principal within 30 days of sending the withdrawal. ” If the client fails to pay the loan and interest within the set time limit, the loan will be remunerated at a penalty interest rate,” adds Sean Cole.

It works similarly in Good Finance. “For this purpose, we will issue the client with a quantification of the amount owed. After payment of the obligation we will ensure the cancellation of the established lien, ” adds Jessica Brown, spokeswoman of Poštová Good Finance. This bank shall not penalize the withdrawal of the loan agreement or the non-drawdown of the loan after the signature of the contract.

After withdrawing from the loan agreement, GFI shall refund to the client the fees and repayments already paid to it, such as the loan fee, the repayment already paid and, where applicable, the insurance fees that have already been settled.

If you decide to terminate the credit agreement only after you have filed a pledge, then you must ask the bank to draw up a proposal to withdraw the deposit.

If you decide to terminate the contract after the registration of the lien on the land register, you will ask the bank to issue a credit, which it will send directly to the cadastre in order to delete the lien. At that time, however, you will lose the fees you paid to the land registry.

Pumping can be prolonged

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When postponing the drawing of a pre-approved loan, you need to be careful at what stage of choosing an apartment or house you are. At GFIC, the half-year period of real estate selection cannot be extended. “After the withdrawal period, the loan is closed and the client no longer draws it. If he is still interested in the loan, he must apply for a new one, ” explains A. Jamborová.

At Good Finance, the loan withdrawal period has also been six months since the contract was signed. ‘The loan agreement shall specify the period by which the credit may be drawn at the latest after the signature. The client may ask the bank to extend it if it is not sufficient for him, ” explains Brown.

If you have an approved loan and a signed contract for the purchase of real estate and if the seller withdraws from the purchase contract, you have the opportunity to find another property before drawing the loan.

You then ask the bank to change the loan object, but you will pay extra for it. “This is a change with approval, so the bank reassesses the loan based on the value of the property that the client proves. A fee of USD 200 is charged for the change, ” adds Sean Cole.