A mortgage is a guarantee made on real estate in order to protect a lender, usually a bank, against the default of a borrower. Once the credit has expired, the mortgage can be lifted. That said, in some cases, the mortgage can be lifted before the end of the loan repayment. Read the detailed explanations of our experts on the subject later in this article.
Mortgage and mortgage lifting: what is it?
There is no lifting of a mortgage without the prior existence of a mortgage. It is therefore important to understand what a mortgage is.
Mortgage
the risk of failure of the borrower is inherent in the credit business. Thus, in order to protect credit institutions against the insolvency of their borrowers, the mortgage constitutes one of the guarantees that can be put in place. It consists in pledging one or more real estate assets with the lender.
When the borrower is unable to honor his commitments, the credit institution can therefore proceed to the realization of this guarantee. Note that a mortgage covers the entire duration of the credit and is registered to land registration services.
Read also: Mortgage loan: for which projects?
Mortgage lifting
Still called mortgage release, the lifting of mortgage consists in officially putting an end to the possession of a mortgage by the creditor. This is a legal act through which the credit institution certifies that the borrower has effectively settled his outstanding loan. At the same time, the property returns by right to the borrower and can no longer be seized.
Typically, a mortgage ends one year after paying off the credit it covers. There is then automatic mortgage waiver. This operation does not require any specific administrative procedure. However, certain special circumstances may lead to the termination of the mortgage. In this case, the mortgage is lifted at the request of the borrower.
Partial mortgage lifting
In the event that you have more than one property under mortgage, you can choose to lift the mortgage on part of this property. This is called a partial mortgage lifting. If, for example, you put two buildings under mortgage, you can carry out a partial waiver by selling one of these buildings. This operation obviously requires the intervention of a notary.
The proceeds from the partial sale of the mortgaged property are normally used to repay part of your credit with the financial institution. However, you can request to dispose of the proceeds of the sale. The credit institution then generally requires un early partial repayment. This early repayment covers the partial mortgage lifting costs.
Under what circumstances is a mortgage lifted?
Several situations can lead to a mortgage being lifted. In addition to the end of the repayment of the loan granted, this operation can in fact be considered following a moving house or at the sale of the property concerned. It can also intervene following the loan repurchase by another establishment or at a full prepayment of the loan.
As you will understand, the mortgage can therefore take place before the expiry of the loan granted. But it remains, in all cases, conditional on the full repayment of said credit.
Who can decide on the mortgage lifting?
Mortgage release is usually the result of a mutual agreement between the lender and the borrower. In the event of early repayment, the two parties agree to terminate the mortgage by formalizing their decision. An authentic notarial deed is then drawn up. We then speak of out-of-court mortgage lifting. This is the simplest and most common solution.
However, there may be times when the creditor objects to the release of the mortgage. The borrower must then make recourse to justice to settle the dispute, while clearly justifying the repayment of his credit or the expiration of the mortgage period provided for. Following this, the legislator can make a decision to waive the mortgage. The creditor is then obliged to release the property from its guarantees.
How much does a mortgage lift cost?
The mortgage release does not require fees when it occurs automatically at the end of the credit. On the other hand, when this procedure takes place before the end of the loan, certain costs are the responsibility of the borrower. These are first of all the notary fees which include fees and formalities. Note that these costs are subject to VAT (20%).
Apart from notary fees, the borrower must pay:
- Registration fees at the Public Treasury;
- Contribution to Real Estate Security;
- Additional Administrative Costs taken by the credit institution for the registration of the lifting of mortgage.
Most of the time, the costs of early mortgage lifting are included between 0.6 and 0.8% of the amount of credit granted.
Also note that for the deduction of mortgage lifting costs two scenarios are to be taken into account. If you sell your property to settle the loan, the notary will deduct the mortgage lifting costs from the sale price. On the other hand, if you repay your loan with your savings, for example, you must also provide for a supplement to settle the mortgage lifting costs.
Read also: What is the cost of a mortgage?
How do you know if a mortgage lift is effective?
It is important to note that a mortgage is said to be lifted when the notarial deed certifying that the credit has been fully repaid is issued. Just like the act of placing the property under mortgage, the act of lifting the mortgage must be formalized and registered at the mortgage office. Everything is done under the supervision of a notary.
If the mortgage is lifted following a court decision, a mortgage cancellation may also be necessary.
In order to ensure the effectiveness of a mortgage lifting, you can get closer to a notary. the land registration service is also available to provide you with more information about your mortgage. All you need to do is request a mortgage statement for the property in question. This mortgage statement represents in a way the identity card of the property in question.
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