Among the guarantees compatible with obtaining a home loan, the conventional mortgage appears to be the most frequently chosen solution. It materializes in the form of an agreement between the borrower and the credit agency. If the purchaser can no longer pay the loan, a seizure of the property becomes possible: until the contract is completed, the owner can be dispossessed of his dwelling.
HOW DO I MAKE A CONVENTIONAL MORTGAGE?
In order to set up a conventional mortgage, it is essential to resort to a notarized deed: this document validates the procedure and allows, in case of non-repayment of monthly payments, to provide for a seizure of the property. During this process, the notary must inform and advise the purchaser, stating that if he no longer honors his monthly payments, he may be exposed to a risk of expulsion. The mortgage is confirmed by an agreement that serves as a contract between the debtor and the creditor, with the assistance of a notary. This document contains three key data:
-The nature of the property
-The amount of the guaranteed sum
-The debt repayment period.
WHAT ARE THE BENEFITS OF THIS GUARANTEE?
For the loan organization, the possibility of considering a conventional mortgage is an argument in favor of accepting the credit file. Banks always review the borrower’s guarantees before forming an agreement and, when that possibility of agreement exists, they are more confident.
Moreover, this process is useful to secure a single new debt. In case of an inability to pay or unforeseen, the realization of such a contract allows the debt to be eliminated.
WHAT TO KNOW?
While the mortgage is safe and reliable for both bankers and borrowers, they are still embarking on a potentially risky dynamic. Thus, the non-payment of monthly payments results in the dispossession of the property and, therefore, a problematic situation for the purchaser — who may lose his dwelling in extreme cases.
In addition, since this is a highly formalized approach, the requirement to visit the notary adds additional constraints to the purchase process.
THE FREE TO PRÉVOIR FOR A CONVENTIONAL MORTGAGE
In the case of a conventional mortgage, the purchaser must provide an envelope dedicated to financing the various terms directly related to this decision. To obtain this guarantee, you need to think of several expense items:
-The notary’s emoluments. They are equivalent to 0.328 9% of the TTC amount of the credit, a price to which the sum of 131,062 euros is systematically added.
-The property advertising tax (TPF). It corresponds to 0.715% of the amount of credit, sometimes with an increase in accessories. In some cases, this tax is not due —, especially for PtZs or ELPs.
-The curator’s salary. It represents 0.05% of the amount of the credit, plus accessories if applicable.
-The ancillary costs of about 500 euros to finance mortgage slips, enforceable copies and anything charged by the notary.
Finally, the release fee applies if the credit is sold before the full repayment of the creditor when the sale takes place less than one year after the last repayment deadline. To calculate these fees, the amount of the loan plus 20% is used. Subsequently, it should be noted that 0.3 to 0.6% of this amount will be owed by the owner to pay the release fee. They are not due for any sale made more than one year after the last loan maturity.