To obtain a home loan, a borrower can choose to mortgage the acquired property. If the lender can no longer repay the loan, it will be able to apply for a foreclosure to sell the property. The introduction of such a mortgage has a significant cost to the borrower.
Conventional mortgages are a guarantee
As part of a home loan, you can put the property as collateral to cover the risk of not repaying your debt to the credit institution. Unlike legal or legal mortgages, this conventional mortgage is the result of an agreement between the borrower and his financial institution.
The mortgage must be registered with the mortgage office. The mortgage agreement is, therefore, a contract signed between the debtor (the borrower) and the creditor (the bank) before the notary. It indicates the nature of the property involved in the mortgage, the amount of the guaranteed amount and the time it takes to repay the debt. It is not possible to mortgage all of your real estate assets. In this case, the mortgage agreement could be considered null and void.
What does a rechargeable mortgage mean?
This possibility initiated in 2006 to support household consumption was abolished in 2014. When a loan secured by a rechargeable mortgage has been partially repaid, the amount repaid can guarantee new credits on advantageous terms and without further formalities.
The rights and obligations of conventional mortgages
To make a mortgage, you must own or usufruitier the property concerned. You must be able to exercise this choice without being represented or assisted by a third party.
For the duration of the mortgage, you are required to keep the property. When you are married, you cannot make a mortgage on the family home without your spouse’s consent.
In the event of non-repayment of the credit, the creditor may request the seizure of the property. His application led to a forced sale at public auction. It is then paid on the sale price before the other creditors. He may also choose to be assigned the property to clear the debt. When the credit is repaid, the creditor must issue a mortgage release.
The erasure of the mortgage office registration comes only one year after the end of the credit. Any resale of the property during this period, therefore, requires the creditor’s amicable agreement.
The cost of the conventional mortgage
When signing the mortgage, the borrower must pay the property advertising tax, the registration fee for the land advertising department and the notary’s remuneration. In the event of early repayment of the credit, it must pay additional release fees and fees and taxes to the property advertising service. The cost of a mortgage is therefore about 2% of the guaranteed amount.
A conventional mortgage can be a guarantee when you take out a home loan. Both the borrower and the creditor have rights and obligations.