Release of funds
The actual payout of the capital by the bank, in one go for an existing-property purchase or in successive drawdowns on a construction site. For existing property, funds pass through the notary on signing day. Until release happens, brokerage fees are, as a rule, not payable.
Key points
- Disbursement of the borrowed capital to the seller, passing through the notary for an existing-property purchase.
- On an off-plan purchase, funds are released in progressive drawdowns tied to construction progress.
- The bank may require a signed drawdown certificate from the borrower before each transfer.
- Brokerage fees are only due after the funds have actually been released.
Frequently asked questions
How does fund release work on a works loan?
Release can be partial or total depending on the bank: some release the full amount on presentation of quotes, others proceed in tranches on presentation of invoices. During the progressive drawdown phase, the borrower often pays only interim interest on capital already disbursed, reducing the instalment before full amortisation begins.
Why are brokerage fees not due before fund release?
The law governing IOBSP activity prohibits collecting any remuneration before the service is actually rendered, which materialises at fund release. This rule protects the borrower against commercial overreach and obliges the broker to see the mission through before invoicing. It is foundational to the trust relationship.
What is the difference between fund release and the notarial transfer?
The notarial transfer specifically refers to the flow by which the bank sends funds to the notarial office before deed signing. Fund release is the generic term covering this mechanism for existing property, but also direct drawdowns to the developer or contractor for new builds and works. The notary plays no intermediary role in the latter case.
In practice
A client buys a new off-plan apartment for €320,000. The bank releases funds in four drawdowns: 35% at foundation completion, 70% at weathering, 95% at completion and 100% at handover. The broker advises the client that interim interest accumulates on each tranche before full amortisation begins.
Official sources
- I want to obtain a mortgage (release of funds) · Service-Public.gouv.fr
- Mortgage credit (official guide) · Service-Public.gouv.fr