Means of sale of the mortgaged real estates

A house purchased at a price obtained by the buyer partly through a bank loan may be sold through various means, but only with the consent of the lending bank:

 

  • contracting of a bridge loan;
  • by anticipated repayment of the original credit;
  • transaction on credit.

 

 

  • Contracting of a bridge loan: If the owner of the mortgaged property wants to purchase a new property, but he doesn’t have the amount needed for repayment of the existing credit, can opt for contracting of a bridge loan from the same banking institution from which has contracted the construction loan and for which the property is mortgaged or from another banking institution. He will get the amount needed to purchase a new property with the condition that during 12 months – designated by the bank – to complete the transaction of sale of the real estate owned. During the bridge loan is paid only the interest and at the end of the time the loan will be paid entirely from the money obtained from the sale of the first property.
  • The anticipated repayment of the credit: If the seller doesn’t have the amount required for paying the credit, he can conclude a sale-purchase agreement – preliminary obtaining the bank agreement – asking for an advance from the buyer for paying the credit, and when the banking institution raises the mortgage – in the real estate register excerpt is confirmed that the property is free of charges, the buyer will pay also the difference of the amount until the full payment of the building.
  • Transaction on credit: Another variant is when the owner finds a customer willing to buy the property also through bank financing. The seller will address to the bank to obtain the agreement of establishing a junior mortgage, on the property concerned, in the favor of the buyer’s bank – is preferably the same creditor bank with the one of the seller, to simplify the procedure and at the same time for the guarantee of receiving the bank agreement.
  • If the buyer receives the amount requested, the bank of the buyer will establish a junior mortgage on the property that follows to be traded and it transfers the money to the credit institution of the seller, for this one to make the anticipated repayment. The creditor of the seller will have removed from register the mortgage and then the buyer’s bank will have the registration of the first lien mortgage on the property.
  • The conclusion that emerges from the above means is that a real estate, even if it includes the right under a mortgage in favor of the bank, can be traded under certain conditions. The mortgage itself does not imply the prohibition of alienation, the latter being usually required by most banks, in addition to the right under a mortgage, before granting a mortgage credit.