Mortgage loan: which guarantee is best suited to your profile?
Today when you take out a mortgage, in addition to loan insurance and application fees, there are also warranty costs to be expected. The guarantee is essential since it makes it possible to guarantee the repayment of the credit from the lending bank. The banks are asking for this guarantee. (Indeed, they have created guarantee organizations to protect themselves. When you take out a mortgage, the bank must ask you for a guarantee on the financed property, note).
Cost of the guarantee: between 0.6% and 2.2% of the loan
The guarantee can take various forms with variable costs. First you have the real guarantees that are the mortgage or the Registration to the Privilege of Money Lender (IPPD). Then you have the joint guarantee of a guarantee body type Good Finance (leader on the market of bank guarantees). Some banks even have their own guarantee organization. And finally you have mutual guarantees for different professions like civil servants.
The cost varies widely depending on the organization: between 0.6% and 2.2% of the loan. The most expensive guarantee is the mortgage because it is made before a notary. Then registration for the Lender Privilege is a little cheaper than the mortgage because it is exempt from property advertising tax.
But in both cases, the guarantee must be lifted at the end of the loan, which generates the cost of a show of hands. The most advantageous guarantee remains the joint guarantee, such as Housing Credit, because part of it can be reimbursed at the end of the loan.
Indeed, in case of loan repurchase or at the end of the repayment of the credit, the part (which corresponds to the Mutual Guarantee Fund) will be reimbursed automatically by the guarantor to the borrower.
What is the point of opting for the mortgage knowing that it costs more at entry and exit?
Overall, if we compare the different costs, it is true that the mortgage (guarantee taken on the property directly) will cost around 2% against 0.5% as regards the joint guarantee once the part reimbursed to the l borrower at the end of the loan. The problem is that the guarantors are based on the quality of the borrower, his file, his indebtedness, the loans he has already taken out, his income, his remaining living. While the mortgage will base only on the value of the property to secure the loan.
No IPPD for VEFA
When the guarantee is refused by the surety, in this specific case, the mortgage is privileged or a real guarantee like the IPPD. If the latter is cheaper, you should know however that this type of guarantee can only be taken on existing goods. The IPPD is therefore not possible for a house under construction or on a Sale in a future state of completion (VEFA), unlike the mortgage.
Only 12% of borrowers opt for the mortgage
Note that in most banking networks, the surety is often privileged and it is only in the event of refusal of the surety that a mortgage guarantee is then offered to the clients deemed solvent.
Indeed, today only 12% of borrowers opt for the mortgage. This solution remains interesting in particular for multi-owners: those who already have a property can use it as mortgage guarantee; that is to say that a mortgage is taken on the property to finance another investment such as the purchase of property abroad or the purchase of shares.