{"id":21193,"date":"2023-07-25T09:32:11","date_gmt":"2023-07-25T07:32:11","guid":{"rendered":"https:\/\/www.sonneil.com\/blog\/?p=21193"},"modified":"2023-07-25T09:32:14","modified_gmt":"2023-07-25T07:32:14","slug":"provision-of-funds","status":"publish","type":"post","link":"https:\/\/www.sonneil.com\/blog\/en\/provision-of-funds\/","title":{"rendered":"Provision of funds in a mortgage: How it works"},"content":{"rendered":"
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The provision of funds is a fundamental step if you are going to apply for financing for the purchase of your new home. So that you are not caught by surprise and have everything ready, in this post we tell you what it is and how the provision of funds in a mortgage works.<\/strong> Let’s go there!<\/p>\n\n\n\n

What is the provision of funds in a mortgage?<\/h2>\n\n\n\n

The provision of funds, which is also called “reserve fund”, is a mandatory step that must be processed in the process of applying for and signing a mortgage. Once the bank has given us the go-ahead and granted us the mortgage, we have to pay a series of management costs that are handled by the bank.<\/p>\n\n\n\n

For this reason, the financial entity will ask us for a specific amount<\/strong> to cover these expenses and, once the payments have been made, the accounts will be settled with the bank, which will return the remaining money to you.<\/p>\n\n\n\n

So it is important that you have some money saved to be able to make that down payment for the mortgage.<\/p>\n\n\n\n

What expenses are covered?<\/h2>\n\n\n\n

A few years ago, mortgage and purchase and sale expenses amounted to around 10% of the price of the property, which meant a fairly significant outlay for borrowers.<\/p>\n\n\n\n

However, since the so-called “mortgage law” of 2019 was passed, the amount that must be delivered to the bank as a provision of funds has been reduced quite a bit. As of today, you will only have to pay the appraisal of the home and your copy of the deed of sale.<\/strong><\/p>\n\n\n\n

Also, the banks usually estimate the necessary money upwards so that there are no problems and to ensure that they will have the right amount. But don’t be confident: ask the bank for the invoices of the expenses that they have faced with the provision, and make sure that they return the surplus amount to you.<\/p>\n\n\n\n

\"Provision<\/figure>\n\n\n\n

How does a provision of funds work?<\/h2>\n\n\n\n

These are the steps that the financial institution follows regarding the provision of funds:<\/p>\n\n\n\n