In order to grant a home loan, a bank must require a home loan guarantee, the rate of which will be defined according to the profile of the applicant. This guarantee allows the bank to protect itself from possible financial losses in the event of the death or disability of the insured, which will make it unable to ensure the repayment of this loan.
However, there are different types of guarantees and it is best to find out about every detail before the taking out a home loanso let’s see together what is the guarantee of a mortgage loan and what is it for.
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What is a mortgage loan guarantee?
The real estate loan guarantee is a mechanism put in place by financial organizations such as banks, in order to protect themselves when accepting a loan in order to finance new or old real estate, for an insured person. Unlike mortgage loan insurance, which protects the subscriber throughout his loan and reimburses the bank in the event of his death, the guarantee of a mortgage loan protects the lender in the event of default. of payment and guarantees him a full reimbursement from the insured.
It intervenes when the borrower insurance contract has reached its limits. The guarantee of a home loan is an essential element to benefit from a loan from a financial institution which, after examining the profile of the borrower, accepts or declines the loan request. The cost of this warranty is higher or lower depending on the different types available.
Types of home loan collateral
Several home loan guarantees exist, each of them has precise specificities and an often high cost. The first is the mortgage, it allows the seizure of the property by the bank with the support of a notary, in order to resell the property and reimburse the unpaid installments by the loan subscriber.
There is also the privilege of lenders of money, also called “PPD guarantee”, the latter works like the mortgage, but only concerns old properties and fully finished new properties and the guarantee costs are lower than those during ‘a mortgage. It is also possible to obtain a mortgage loan guarantee, by presenting a bank guarantee which is taken care of by the surety company and is generally created by the banks themselves. Note that there are three other types of mortgage guarantees :
- mutual surety, offered by certain mutual insurance companies;
- the joint surety, a person acts as guarantor for the borrower;
- the civil servant bond, which is only offered to civil servants.
The cost of each of these guarantees varies and can weigh heavily in addition to the application fees, the cost of borrower insurance. In addition, all notarial costs as well as registration costs with the mortgage office must be borne by the latter. This is why it is important to be well informed about the different types of mortgage loan guarantees, and to make sure to reduce their costs as much as possible.
How to reduce your mortgage loan guarantee fees?
To avoid ending up with home loan guarantee fee consequent, the best is to privilege the taking of a guarantee in the form of deposit, this option is more and more used within the framework of the mortgages, the latter does not require the signature of an authentic act at the notary and n therefore only causes one-time costs to be paid when the funds are released.
When applying for a home loan, be sure to negotiate the guarantee costs and ancillary costs with your insurer by using your borrower profile, the FMG can even reimburse you for a significant part of your costs if your profile is suitable. It is obvious that the best thing to do is to assess all the possibilities that will allow you to have lower costs, for this you can call on a real estate broker, who will advise and guide you in the choice of your loan guarantee. real estate, or you can help yourself with insurance and warranty comparators online to help you choose the loan and the guarantee that suits you.
2023-07-18 03:59:52
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