When it decides to accept or refuse a request for financing, the bank is based on several specific criteria. In addition to the debt ratio, which appears to be a clear indicator of the investor’s ability to repay monthly payments, the credit institution is systematically interested in the borrower’s guarantees , which must be strong and reliable. If the loan is considered risky or if the purchaser wants to strengthen his file, he can resort to the mortgage bond.
The mortgage deposit, what is it?
The borrower realizing a mortgage bond as part of his mortgage loans to mortgage a property: in other words, if the monthly payments are not assumed, a seizure becomes possible . This type of bond is considered when the buyer does not have the ability, autonomously, to consolidate enough guarantees to validate his credit report.
How to guarantee your loan with real estate?
The guarantee of a loan, based on real estate, must obligatorily be the subject of a notarial act . Otherwise, the initiative is considered void and the credit institution can not, legally, seize the asset in case of default of the borrower. The use of a third party for a mortgage bond is to be considered when the individual only owns an undivided property – and can not obtain the agreement of the other owners. More frequently, this solution is considered by purchasers accessing the property for the first time and needing, to build a stronger file, an external guarantee.
When does the mortgage bond end?
If the mortgage bond involves a risk (of seizure!), It should be known that this device ends when the credit is repaid . Note that the termination of the contract and the death of the borrower or guarantor may also result in the deletion of the mortgage, when the conditions so provide. Be careful, if there is no information on these particular cases on the agreement, the borrower’s heirs pay the debt – or those of the surety assume this role.
Housing loans, a reliable alternative?
If some people remain skeptical about the idea of setting up a mortgage bond, they may consider another solution: housing loans. This process, which does not involve asking for a notarized deed, is completed more quickly, which sometimes makes it easier to release funds for the borrower. Unlike the mortgage bond, the housing loan is an active guarantee that follows the buyer and strengthens his project. Naturally, to benefit from it, one must meet certain criteria: the housing loan studies each file in detail before giving a definitive agreement (or formulating a rejection). Note that in case of refusal, individuals can rely on different companies providing security for home loans .
To guarantee a credit, it is possible to subscribe to a deposit with a third party. If they wish, buyers are also able to make a mortgage bond. Be that as it may, it is important not to confuse this approach with the mortgage , which the borrower himself assumes for his own purchase.