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Credit guarantee, which one to choose?

Do you have a real estate project but you need a loan to carry it out? Before you get started, you need to carefully consider the warranty options available to you. In fact, most credit organizations will only accept to finance your project with a guarantee that protects them if you are unable to pay your installments. You will therefore have to decide between the mortgage, the privilege of money lender and the bond, mutual or joint and several. Useful information to help you there is here.

 

The mortgage

mortgage loan

This is a traditional guarantee which must be confirmed by a notary deed and registered with the mortgage office of the place where the property is located. It will therefore cause certain costs, in addition to the land registration tax which amounts to 0.615% of the loan amount. The mortgage takes rank on the date of its registration, in other words the creditor has every interest in having his debt registered as soon as possible. It can be taken on any property but know that if it is already completed, the privilege of lender of money will cost you less.

 

The registration in privilege of money lender (IPPD).

money loan

The privilege of lender of money is also a traditional guarantee which requires a notary act and a registration for the conservation of mortgages within two months of the sale. The only one who can take advantage of it will be the financial institution that supports your project. The IPPD ranks on the date of the sale, that is to say it has priority over all the guarantees that could be taken on the property.

Its cost is lower than that of the mortgage because it is exempt from land advertising tax. On the other hand, it can only concern old goods and cannot therefore serve as a guarantee when acquiring an unfinished new good.

 

The deposit, joint or several

The deposit, joint or several

The financial institution can accept as a guarantee that a person or a specialized company will stand surety. In general, this is cheaper than the mortgage.

In the case of a joint and several surety from an individual, the person who stands surety agrees to pay in place of the person who is guaranteed in the event of default in the repayment of the installments. Please note: this is not a commitment to be taken lightly as it can have serious consequences.

In addition, do not forget to put the forms there, otherwise your deposit can be declared null and void: the act of guarantee must be handwritten, contain a certain number of obligatory mentions and its nature (simple or interdependent) must be clearly stated. It should also be noted that a credit institution cannot claim a commitment which was manifestly disproportionate to income or assets at the time of signing the deed.

 

What about bonding companies?

credit loan

Created by the banks, like the device for a rental lease, they ensure the repayment of the loan in the event of non-payment by the borrower. The organization then has recourse against the borrower in order to obtain repayment of the sums advanced. This bonding system is chargeable but does not entail registration fees for the preservation of mortgages or notary fees. It is a private document which has no particular legal formalism. It is granted by the banks according to the amount of the loan and the personal contribution for the purchase of the property. The best known of these surety companies is Widesure Credit.

Finally, note that these guarantees are only a precaution for the financial institution, but are in no way an obligation.

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