Real estate credit glossary

A document specifying to the borrower that the lender agrees to lend the funds necessary for the project. The loan agreement is not the loan offer because it often includes reservations (insurance, surety, etc.). However, it allows the borrower to know that the lending organization accepts his file and under what conditions.

Advance payment

cash

Amount paid by the purchaser upon signature of the reservation of the property. Required by the seller, the deposit constitutes a commitment guarantee.

Authentic deed of sale

money

The act was drawn up by the notary who defines the rights and obligations of the two parties, buyer and seller and thus formalizes the sale of real estate.
NB: The funds necessary for the project are released on the day of the signing of the deed. A sufficiently distant date must be provided in order to allow the reflection period of 10 days to elapse (cf. Scrivener law).

Private deed

The private deed is a document recording an agreement. It is established by one or both parties and signed by them. The writing is free. The signature must be handwritten and affixed at the end of the act. There must be as many originals of a private deed as there are participants in the deed.

Real estate agent

Specialist in real estate transactions. He offers real estate for sale and is involved in the conclusion of legal acts.

Personal contribution

Amount used to finance part of the property acquisition. It can come from different sources, donations, investments, sale of the property, or additional loans (1% employer, loan at% rate, etc.).
NB:

The calculation of the contribution is different according to the lending organizations. Some only take into account the actual contribution (donations, investments, etc.). The fees of notaries and mortgages are always deducted from the contribution.

Lease (or rental contract)

A document defining the contractual relations between owner and tenant.

Real estate

Are considered the property of a real estate nature, under the expression “buildings”, as well as land as houses, apartments, estates, etc.

Cadastre

The cadastre is a document drawn up by the municipalities. It identifies all land properties and fixes their rental value serving as a basis for local taxes. Each town hall has a cadastre service which makes this document available.

Repayment capacity (or debt ratio)

cash

Each lending organization applies a coefficient to calculate how much the borrower can repay each month. The average norm is 33% of income; it includes loans already outstanding.

Bail

The surety is the commitment of a third party to the bank to settle the debt of the borrower when the latter no longer meets its obligations.

Planning certificate

Indispensable before any real estate transaction, it constitutes the main official document of information on the possibilities of using land as well as on the architectural constraints to be respected (forms of roofs, windows, the color of tiles), whether built or not.

Condominium fees

These are the costs and expenses necessary for the proper functioning of a condominium.

Coefficient of Land Occupancy (COS)

It enables you to find out the maximum number of square meters that can be built in relation to the land surface. It is the Local Urban Planning Plan (ex-POS: Land Occupancy Plan) which fixes one or more COS for each zone.

Compromise of sale (or promise to sell)

A legal act that commits the seller and the buyer and which corresponds to a firm sale. It can be either an authentic deed signed at the notary’s office or a private deed.

Housing Savings Account (CEL)

Anyone can hold both a CEL and a PEL (Plan Epargne Logement) in the same establishment and collect the sums for the same operation. Compared to the ELP, the CEL is a very flexible housing savings formula, but it is much less efficient.

Conditions precedent

money

Contained in a preliminary contract (the promise of sale or compromise of sale), the conditions precedent suspend the execution of the contract at the occurrence of an event. The contract will only take effect when the planned event takes place.

Individual House Construction Contract (CCMI)

In most cases, the owner of the land (owner) is an individual. The Individual House Construction Contract imposes a legal framework on builders. It usually involves the provision of plans.

Loan agreement

Once accepted by the borrower, the loan offer becomes the loan contract.

Cost of credit

The price of the credit includes the total amount of interest received, to which must be added the cost of insurance and handling fees.

Credit in fine

cash

A fixed-rate mortgage, not amortizable, the borrower only repays interest during the term of the loan. The borrowed capital remains intact until the term of the credit and, at maturity, the borrower repays it in one go. This type of credit is often used in combination with a savings contract which allows the accumulation of interest to settle the loan at its term.

Relay credit

Intended for owners, it provides funding for new housing without waiting for the resale of the old one. It is a short-term loan (two years maximum) whose monthly payments can be collected at the time of the sale. Often associated with a long-term loan, it is then used under the name of “resale loan”.

Credit, loan or loan

cash

Contract by which an individual is loaned funds to finance a purchase. The creditor is a lender such as a bank or an institution specializing in credit.

The debtor is an individual. It relates to a specific sum of money and for the performance of a specific operation. The parties define the conditions from the start: the amount borrowed, duration, rate, amortization, etc. NB: each personal situation, each type of operation (purchase of a main or secondary residence, investment, etc.) has its type of credit.

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