What is the credit housing guarantee?
When a home loan banks are obliged to protect themselves in case of default on your part.
There are two types of collateral required by banks:
- The mortgage
- The deposit, which is the guarantee offered by financing company.
The Home Loan Guarantee is therefore an alternative to taking out a mortgage.
Clearly, in exchange for a contribution at the beginning of the loan, the organization is committed to the bank chosen to replace you in case of default.
The principle of the financing company guarantee is based on the fact that you, like many other borrowers, participate in a mutual guarantee fund that will allow you to recover at the end of your loan a portion of the amount you originally paid out.
What are the advantages of the deposit compared to the mortgage?
- You recover some of the deposit at the end of the loan;
- In the event of a full repayment of your loan before the scheduled date, you are exempt from the release fees that you will have to pay in the event of a mortgage;
- No steps or administrative formalities are required on your part (your bank deals directly with the housing credit institution);
- financing company is based on an approach of support and dialogue in case of impossibility of payment on your part, advisors will seek with you the best solutions to best meet your financial difficulties.
Conclusion: Benefit from a cost and guarantees more advantageous compared to those of the mortgage.
The difference between Home Loan Insurance and Loan Insurance
The borrower insurance and the Home Loan Guarantee do not fulfill the same functions. They are both mandatory and subscribed separately.
- Loan insurance covers the payment of installments in the event of payment default by you due to illness, disability or death.
- The Home Loan Guarantee will indemnify your bank in the event of non-payment of the due dates on your part. It will cover the amounts not covered by your insurance.
What is the cost of the Housing Credit Guarantee?
The cost of the home loan guarantee is calculated in relation to the amount of your loan. (On average 1.5% of total borrowed capital).
The financing company guarantee offers two types of price lists in order to calculate the amount of the pricing of your loans.
The standard scale is for all types of borrowers and all the security fees must be paid when the loan is placed.
The Initio scale only applies to borrowers under 37 years of age. This scale makes it possible to pay only the payment in the mutual fund of guarantee during the setting up of the loan.
Can everyone benefit from the Home Loan Guarantee?
All individuals without exception as well as family SCI living in France can take out a Home Loan Guarantee.
The bank will present your project to financing company and the latter will determine if it is eligible for the financing company guarantee.
You will need to have full ownership of the property to benefit from the Guarantee.
Remember that for any mortgage application, loan insurance will be recommended. Your lending bank will suggest you to subscribe to its loan insurance, only it is important to know that you are free to take out your loan insurance with any other insurer.