Real estate: what is a mortgage? |
Posted: February 12, 2020 |
What is a mortgage? Mortgaging a home for a loan allows the bank to insure when it offers you credit. If you no longer repay your monthly payments, she can then seize your property. HMO Mortgages Guide explains the operation and the risks of the mortgage loan.
What are mortgage and PPD? When you take out a mortgage, your bank must protect itself as well as possible against a default on your installments. Of course, you will take out borrower insurance, but depending on your profile and your financial situation, this will not prevent you from offering you a mortgage or a PPD. But what is it exactly?
What are the consequences of a mortgage? If you mortgage your house and you cannot pay the monthly payments on your mortgage, your bank can seize it in order to sell it to recover the amount it loaned to you. Before reaching this extreme, some people choose to try to sell their property themselves to raise the necessary funds. When the outstanding principal is repaid, the mortgage is lifted. Attention, the release of mortgage has a cost! It must be drawn up by a notary and cannot be executed without the agreement of the creditor. Note that if you buy another home by renegotiating your credit and not by contracting another, the mortgage will be transferred. You will, therefore, avoid the costs associated with the release. How much does a mortgage cost? Mortgage expenses can be quite significant. Here is what comes into account in calculating the mortgage of a house :
For example, on a loan of 150,000 euros, the conventional mortgage will cost you 2% and the PPD 0.64%. You will understand, the mortgage loan has a cost, especially since the lifting of the mortgage requires the drafting of other acts that will also be invoiced to you. How to protect yourself in case of mortgage? To avoid seeing one of your real estate assets seized in the event of non-repayment of the monthly payments of your mortgage, it is essential to protect yourself by taking out borrower insurance with guarantees adapted to your financial, professional and personal situation. According to the contract taken out, in the event of death, disability or even loss of employment, this insurance will take over over a fixed period so that you can continue to repay your loan and therefore enjoy your property.
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