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Guarantee mortgages
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 An obligatory aspect of your credit At the time of the purchase of a real estate, the banks ask for the borrower security on the financed good. This guarantee is obligatory.
Thus, in the event of problem, the banks will be able to obtain the resale of the good in their favour, and to recover the funds which they have advanced.
To guarantee the loan, four choices are possible: The mortgage: it is a traditional guarantee whose cost is relatively high (tax of land publicity and fresh of recording at the Office of the Mortgages).
The Inscription in Privilege of Lender of Sums of money (IPPD): it is a traditional guarantee relating only to the old goods. It is less expensive than the mortgage (not of expenses of recording and not of tax of land publicity).
The company of guarantee: the banks created companies of guarantee with an aim of reducing the expenses of guarantee for the private individuals (not of expenses of inscription to the Land Registry, not of expenses of notary).
The mutual guarantee civil servant: it is a guarantee particularly interesting for the civils servant and certain particular activities (research…)
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In the case of a loan of an amount of 150.000€ The expenses of mortgage will rise with 2.820€ The expenses of Inscription in Privilege of Lender of Sums of money will be high with 1.660€, (either a difference of 1.160€) Expenses of guarantee to 2.550€ of which a part can be refundable (1.568€) at a cost Net of 983€.
Let us recall that the expenses of guarantee are included in the financing of the project by the banks and that their cost will have a very weak impact on the total amount of the monthly payments.
At the time of a real purchase, the signature of the commitment to sell involves the payment of an allowance of immobilization, approximately 10% of the good.
The purchaser can ask his bank to pay for him the sum. But attention, the banking guarantee can profit only with the good customers.
The guarantee is not free. The establishment takes a commission generally ranging between 0,5% and 1,5% (excluding VAT) of the amount of the guarantee prorata temporis.
It, in addition, is limited in time to the duration separating the promise and the sale contract.
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 Four possible choices
1 - The mortgage The mortgage is used to guarantee the payment of a debt contracted on new or old real goods.
It is the subject of a tax of land publicity (0,615% of the amount of the loan), which explains its high cost. The expenses of mortgage account for approximately 2% of the amount of the loan.
The mortgage must be the subject of a notarial act, the inscription is carried out at the Office of the Mortgages of the place where the good is. The row of the mortgage takes fixe day bill of its inscription.
2 - The inscription in Privilege of Lender of Sums of money Near to the mortgage, this guarantee relates only to old goods, it is taken with the profit of the borrower.
It thus applies only to the existing goods and cannot thus be used for the sales on plan (Sale in the State Futur of Completion) or for the construction of a house.
The Inscription in Privilege of Lender of Sums of money is less expensive than the mortgage because it is not subjugated with the tax of land publicity.
Like the mortgage, the Inscription in Privilege of Lender of Sums of money must be the subject of a notarial act and must be registered with the Land Registry in the 2 months which follows the sale.
The Inscription in Privilege of Lender of Sums of money takes row at the date of the sale, i.e. it will have priority on all the other guarantees taken on the real estate.
In the event of financial problem, the operation of the Inscription in Privilege of Lender of Sums of money will be identical to that of the mortgage, i.e. seized and sale of the good by legal way.
Under which conditions the borrower will have T it to pay expenses of or Inscription release of mortgage in Privilege of Lender of Sums of money? The replevin is a legal document by which
the creditor attests that the debtor completely refunded his loan. This replevin is automatic 2 years after the normal term of the loan.
Before this term, in the event of resale of the real estate, the purchaser will ask so that the borrower proceed to the release of mortgage or of the Inscription in Privilege of Lender of Sums of money because the bank can make sell the good in the event of unpaid even if the owner changed.
Thus, by this act, the recipient of the mortgage agrees to benefit from it more.
Example: If you buy a real estate over 15 years and that you resell it at the end of 8 years, you will have to pay expenses of replevin (approximately 0,7% for a loan of 120.000€). If you keep this good 2 years after the expiry of the loan i.e. 17 years, you will not have to pay expenses of replevin.
The entry of satisfaction of mortgage is made to the Registrar of mortgages via a notary. The expenses of this act of replevin are the responsibility of the borrower/salesman.
Taking into account the obligatory character of the replevin and the high amount of its expenses, certain specialists consider that in the calculation of the expenses of mortgage or the Inscription in Privilege of Lender of Sums of money, it is necessary to include the expenses of replevin immediately.
3 - The company of guarantee.In order to reduce the expenses of guarantee for the private individuals, the banks created companies of guarantee. It is important to specify that this type of guarantee is advantageous for the customers and also profitable for the banks.
The company of guarantee is committed replacing the debtor in the event of failure of this last.
The other hand, the borrower must pour at the company of guarantee, as of the releasing of the funds, a contribution proportional to the amount of his loan, made up: of a contribution to funds mutual of guarantee which could sometimes be partly transferred him at the end of its credit if there were no problem, of a commission which is definitively acquired by the organization of guarantee.
Example: The Credit Housing This specialized establishment has the role of mutualiser the risks and the principle of the guarantee emitted by the Credit Housing rests on two points: the cost of the guarantee is not proportional to the borrowed capital, the required amount will be partly restored at the end of the loan.
The remuneration of the Credit Housing breaks up as follows: a commission of guarantee acquired with the Credit Housing.
It accounts for 0,5% of the amount of the loan and is reached a maximum with 460€ by loan, a contribution to the Funds Mutual of Guarantee which will give place to a restitution currently of 75% at the end of the loan or if this loan is refunded completely by anticipation.
Example: For a loan of an amount of 150.000€, you will have to pay at the beginning of loan a guarantee of 2.550€ (either 460 € of commission and 2.090€ of contribution to the Funds Mutual of Guarantee).
At the end of the loan to you will be restored 1.568€ (75% X 2.090€). Finally, your guarantee will have cost you 983€ is 0,66% of the amount of your initial loan.
The mortgage with expenses of replevin would have cost you 3.750 € and the Inscription in Privilege of Lender of Sums of money with expenses of replevin 2.590 €.
The Credit Housing is a common organization between all the large banks which take part in its capital whose principal shareholders are: General company (16,5%), Crédit Lyonnais (16,5%), BNP Paribas (16,5%), Agricultural credit (16,5%), Mutual Credit (9,5%), Building and loan association (6,99%).
Important: Certain companies of guarantee propose a guarantee less expensive than that proposed by the Credit Housing, but they necessarily do not refund at the end of the loan part of the Funds Mutual of Guarantee paid by the borrower at the beginning of loan.
Note: At the difference of the mortgage, the guarantee has the advantage of not requiring a replevin since it is about an informal agreement which does not have particular legal formalism. This advantage is particularly important in the event of change of housing.
4 - The mutual guarantee civil servant Only civils servant (national Education, Treasure, postal and telecommunications authorities, atomic Energy, Police force, Justice…) and certain particular activities can benefit from it.
Most known of these guarantees is the CASDEN which makes it possible paid National Education to profit from a guarantee without expenses.
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 What it is necessary to retain:
1 - The mortgage is a traditional guarantee whose cost is relatively high. For a loan of an amount of 150.000€, the expenses of replevin represent 930€ for a total amount of mortgage of 3.750€.
2 - The Inscription in Privilege of Lender of Sums of money applies only to old goods. For a loan of an amount of 150.000€, the expenses of replevin represent 930€ for a total amount of Inscription in Privilege of Lender of Sums of money of 2.590€.
3 - With certain companies of guarantee, you can recover at the end of the loan part of your contribution to the Funds Mutual of Guarantee. Currently, with the Credit Housing, you can recover at the end of the Mutual loan 75% of the Funds of Guarantee paid at the beginning of loan.
If you can benefit from a mutual guarantee civil servant because of your profession, profit because that will reduce the cost of the guarantee considerably.
Whatever your purchase (nine or old), we advise to take a guarantee near a company of guarantee. You will gain there in flexibility and cost. If you choose for company of guarantee (what we recommend), it will remain you to compare the methods suggested.
The Credit Housing will be more advantageous in term of cost of guarantee but you will be refunded only at the end of the loan.
Other companies of guarantee will be more advantageous at the time of the installation of the loan but will not make refunding at the end of the loan.
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Guarantee mortgages
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