In taking a mortgage, it takes a strong commitment because someone has to pay installments with a long tenor (term) of up to 20-30 years. The process of submitting a mortgage to a credit contract is also quite long and requires a lot of money, so you have to think carefully before doing it.

Not infrequently, some people cancel the mortgage process in the middle of the road for various reasons such as funds being used, getting a more suitable home, and others. This is actually legal, but is it possible to cancel a mortgage after the credit agreement is made?

For those of you who are curious, let's immediately find a complete explanation through the following article:

  • Is it possible to cancel a mortgage after the credit contract?
  • Legal Basis for Cancellation of a Buyer's Home Purchase
  • Steps to Take If You Want to Cancel a Mortgage
  • Consequences of KPR Cancellation After the Credit Agreement

Is it possible to cancel a mortgage after the credit contract?

When applying for a mortgage, there are many costs that must be incurred starting from the down payment (DP), tax payments to notary/PPAT fees. Without careful preparation, these costs can feel burdensome which eventually makes someone stop the mortgage process.

But keep in mind, canceling a mortgage after the credit agreement is impossible to do because the credit contract process itself is the final stage of buying and selling a house. At this stage, the notary/PPAT usually has submitted the name of the house certificate back and the processing of other documents such as the AJB has been carried out. In other words, in the eyes of the law there has been a transfer of ownership from the seller to the buyer so that there is no word of cancellation after the credit agreement.

If you have already made a credit agreement and regret it, then what you can do is sell the house or over credit installments. You can avoid canceling mortgages if you look for housing carefully at the start. Here's a list of the best residences in the Sawangan area under IDR 500 million here!

Legal Basis for Cancellation of a Buyer's Home Purchase

Now you realize that canceling a mortgage after the credit agreement is impossible. If you want to stop the mortgage process, do it before the credit agreement, for example after paying the down payment and signing the house order letter (PPJB).

This situation is regulated in the Ministerial Regulation (Permen) of Public Works and Public Housing (PUPR) Number 11/PRT/M/2019 of 2019 concerning the Preliminary Purchase and Sale Agreement System.

In Article 13 paragraphs 1 and 2 of the PUPR Ministerial Regulation Number 11/PRT/M/2019 it is explained for the status of the DP that has been paid that "In the case of cancellation of a house purchase after signing the PPJB due to the negligence of the developer (seller), then all payments received must be returned to buyers." That is, you can get a full down payment if the cancellation is made by the housing seller/developer.

However, in paragraph 2 it is explained that if the cancellation is made due to the negligence of the buyer, the down payment that has been given is not required to be returned by the seller if the value is less than 10 percent of the transaction price. There are 2 points that emphasize this statement, namely:

  • If the payment made by the buyer is at most 10% of the transaction price, the entire payment becomes the right of the developer (seller); or
  • If the payment made by the buyer is more than 10% of the transaction price, the developer (seller) has the right to deduct 10% of the transaction price.

In other words, from the above rules, the buyer who cancels the mortgage before the credit agreement will not receive the full deposited money back because the seller has the right to deduct up to 10 percent of the sale and purchase price.

Steps to Take If You Want to Cancel a Mortgage

Because canceling a mortgage after the credit contract is most likely impossible to do, it's best if you stop the mortgage process before the SP3K (Letter of Confirmation of Approval for Credit Provision) from the bank comes out. There are several steps you can try, including:

Submitting Reasons for Cancellation to the Seller

If you have doubts about the ongoing mortgage process, before the bank decides on the outcome of the application, you should immediately convey the cancellation plan to the seller or developer.

No need to be afraid, explain in detail the things that are considered for cancellation in order to clarify the situation. When both parties have agreed to stop the buying and selling process, also notify the bank officer where you applied for the mortgage so that the ongoing application is immediately stopped.

Responsibility for the Consequences of KPR Cancellation

One-sided cancellation will certainly cause losses for other parties. In this case, if the buyer wants the mortgage process to be cancelled, of course the seller or developer can apply sanctions in accordance with the initial agreement. You as a buyer must be aware that some costs such as booking fees and appraisals are usually non-refundable.

For a down payment, please discuss it together to determine how much value can still be given to the buyer. In addition, so that it does not become a problem that must be resolved in court, the seller and the buyer can set aside Article 1266 of the Civil Code which regulates the matter of default and resolve everything amicably.

Consequences of KPR Cancellation After the Credit Agreement

There are consequences for every action including the cancellation of the mortgage after the credit agreement. If you make a mortgage by buying a house from a developer, the costs that have been paid, such as booking fees , will be forfeited because the decision to cancel comes from the buyer.

In addition, other costs, such as appraisals and tax payments that have been issued, will not be refunded. Even if the house is resold, you as the home owner also have to pay the seller's tax costs which will drain your pocket.

A bit of fresh air, the cost of the down payment given to the developer or seller might be able to return if previously there was an agreement stated in the House Order Letter (PPJB). Unfortunately, of course there is a discount of around 25 percent of the total DP that has been paid so that the money that is returned is not one hundred percent.