What minimum formalities are required for real estate lending?
Minimum formalities required for real estate lending can be said to be a detailed explanation on how the loan shall be financed. One must keep in mind that the concept of security in Malta, being a Civil Law based country is not a Mortgage based security but a Hypothec based security. This means that the bank or finance institution cannot avail of ‘foreclosure’ as such in the case of default but can only resort to judicial measures and obtain a sale of the property by judicial auction. In reality this means that a bank usually requires that it ranks as first creditor vis-à-vis the property on which finance is sought, and a sine qua non is that the property is kept fully insured at all times.
