Insurance borrower, mortgage: what differences?
When buying real estate, banks always ask for a guarantee of payment of the deadlines. Among these guarantees: borrower insurance . It is not mandatory, yet no organization will give you credit without this loan insurance . This is intended to take over in case of incapacity on the part of the borrower due to death, loss of employment, temporary incapacity for work or permanent disability. Until 2017, it was systematically contracted with the bank that authorized the credit. Since January 1, 2018, this is no longer the case. Legislation has changed and now allows insurance companies to offer home loan insurance too. A revolution that allows consumers to compete to obtain historically low rates and, in turn, reduce the amount of their maturities.
A second payment guarantee also exists: the mortgage . It also covers the risk linked to the loan, but this time it relates to real estate: the one acquired with the credit or another property belonging to the borrower. In case of non-repayment of the loaned sum within the time required by the contract, the bank may seize the mortgaged housing to be reimbursed.
To guarantee your mortgage, a borrower insurance or a mortgage?
The delegation of insurance – the passage of a mortgage loan insurance to another, now authorized every year on the anniversary date of the contract – is now a strong argument in favor of this type of guarantee. By playing the competition or using an online insurance comparator to find the lowest rate, the consumer can make great savings that can amount to several thousand euros. Rest that the change of insurance borroweris governed by specific legislation that requires rigorous administrative procedures. Indeed, two months before the anniversary date of the contract, the borrower must send a registered letter to his bank indicating his willingness to migrate to another organization. However, the acceptance is not mandatory, the banking organization can, indeed, refuse if, for example, the conditions of the new contract do not align with those of the original document.
The mortgage , meanwhile, is a notarial act to be signed before an officer of the public authority. An act that generates fees to pay, including those of land advertising. For the rest, it must imitate the credit in its duration and can not exceed 50 years. It can be lifted, subject to conditions, especially when the property is resold and the bank has been repaid the amount it has lent