I’ve sold my house -now what happens?

COULD you give me some information regarding final mortgage payments?

In November we sold our house, which had a €40,000 mortgage on it, through the bank. We thought that our notaire would take this payment from us before he gave us the balance, but he did not.

We were given the full selling amount including the mortgage money. Since then I have paid the bank their monthly mortgage amount, as I assume the bank has a charge on the previous property that I sold. The reason I continue to pay the monthly amount is that I thought I might use this on another house. I have asked the bank for a settlement figure.

Can you tell me the what legal situation is? D.C.

In France, mortgage deeds are generally secured entirely against a property.

Therefore, when the property is sold, it may be possible for the mortgage deed to remain tied to that asset.

Under these circumstances, the notaire involved should send the funds to the lender to pay off the outstanding loan. It is not uncommon for there to be a delay as the French bank cancels the mortgage deed registered against a property.

This leads to a sensitive situation whereby old mortgage deeds, relating to loans that have already been settled, are still attached to a property.

It is the notaire’s responsibility to determine whether there is any outstanding debt or other deeds secured against the house or land before it is purchased.

In certain situations, you may be able to transfer a mortgage from your old property to a new one that you are purchasing.

Of course, you should seek advice to check whether this makes sense financially.

Many lenders do not charge redemption penalties when a mortgage is paid off following a property sale, but will do if you look to remortgage with another lender. When assessing the option of transferring a mortgage from one property to another, it is also crucial that you weigh up how competitive the mortgage is in today’s market. It may well make more sense to pay it off and take out a new loan.

Whichever course of action you choose it is important you consult an independent legal expert.

Jo Cowling, of mortgage brokers International Private Finance (www.international privatefinance.com) answers your mortgage questions. Send queries to mortgage@connexionfrance.com
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