Credit and borrower insurance: what you need to know before buying

After a year 2015 marked by the recovery of the real estate market, the professionals of the sector count on the maintenance of a high level of sales, around 800,000 goods in 2016.

The real estate market is on the rise! First reason: historically low interest rates continue to fall and reached 2.09% in February. Also, the decrease in prices per square meter of 1.6% on average last year, the downward revision of notary fees or the strengthening of the Zero Rate Loan (PTZ) since January, contribute to boost sales. In a very favorable context for investment, a little reminder is needed on the few rules to know concerning obtaining credit and taking out loan insurance.


Prepare your mortgage loan application well.

mortgage loan application well.

If you plan to embark on a real estate investment, you must first assess your budget. Indeed, the amount of your contribution, the price of the property you want to buy or the other credits that you have in progress will have an impact on your loan. For example, it is important to keep in mind that the total amount of the monthly payments on your credits cannot exceed 33% of your income.

Certain fees may also increase the amount of loan required. If you go for example through a real estate agent rather than through an individual, you will have to pay a commission which can be up to 8% of the purchase price. Similarly, notaries’ fees may represent 7 to 8% of the purchase value in the old and up to 3% in the new.

The bank will integrate all these variables into the calculation of the loan it will grant you. A word of advice: favor loans with fixed rates or capped variable rates which will protect you against possible increases in interest rates.


Loan insurance: prefer individual contracts.

Loan insurance: prefer individual contracts.

Once the credit request has been accepted, your bank will require borrower insurance to finalize the transaction. Its purpose is simple: this guarantee will cover the reimbursement of the remaining credit in the event of death or loss of employment.

Very often, your banking establishment will offer to subscribe to its group contract. However, it is better to opt for individual insurance, which is cheaper and more personalized. The Lagarde law indeed authorizes the delegation of insurance, which means that a borrower can choose a contract different from that proposed by his bank.

One of the tips for finding affordable benefits is to go to online insurance comparators where you can access different offers from the cheapest to the most expensive. Note, however, that the contract chosen must be validated by your bank and that the guarantees must be of a level similar to those initially proposed.


Succeeding in your real estate investment

mortgage loan

It’s reducing the financial burden of certain compulsory costs simply requires a little anticipation and organization. In addition, do not forget that to support you in the purchase of a property, you can take advantage of a certain number of fiscal measures and devices, including the Pinel Device and the 0 Rate Loan.

Credits and divorce: what happens to your credits?

45% of marriages end in divorce. Infidelity, lack of confidence, possessive jealousy, financial problems, voyeurism of in-laws are just a few explanations for this figure. Leaving the person you have lived with for many years can be painful. Added to this pain is to let the loved one, the anxiety of financial matters. What happens to your credits?


The 4 forms of divorce

Before talking about finance, do you know the different types of divorce?

  • Divorce by mutual consent: more and more widespread, this so-called amicable divorce asks the spouses to agree on all the effects of the divorce.
  • Divorce for fault: If a marital fault was committed during your marriage by you or your spouse, you can request a divorce for fault. If there has been a fault, the spouse at fault may be required to pay damages.
  • Divorce for definitive deterioration of the marital bond: used when there has been no more common life for more than two years between the spouses.
  • Divorce upon acceptance of the principle of marriage breakdown: You and your spouse agree to divorce but you cannot find a consensus on the effects of the divorce, opt for this divorce.


The 3 major matrimonial regimes

The 3 major matrimonial regimes

There are also three major matrimonial regimes (mode of operation established by the marriage contract):

  • The regime of separation of property outright: property acquired before and during the marriage reverts to its owner. For purchases in common, they are divided according to the contributions of each.
  • The regime of participation in acquisitions: it is the same thing as the regime of the separation of goods, except that the goods are calculated according to their difference in value between the time of purchase and the separation to determine the increase in wealth of the couple before dividing.
  • The universal community regime: as its name suggests, all property is considered common, even that acquired before marriage. In the event of separation, each has half of the common heritage.

From your matrimonial property regime, you should know what will happen to your property and that of your spouse. Will you share them fairly? Does everyone leave with the furniture they bought? Ask your notary and your lawyer to put things flat.


Divorce, and the credits in all that?

divorce debt

You get a divorce but what happens to the credits in the process of being repaid?

  • Common debts : Financing your child studies, paying the rent for your house, paying off your consumer credit for the purchase of your swimming pool are common debts. They report to the maintenance of your household or allow you to finance the education of your children. In this case, they are to be reimbursed by the two former spouses.
  • Personal debts : You organized a trip with friends during your marriage but your spouse did not accompany you? It is a personal debt. All debts which do not concern either household or education are personal debts. Here, you are the only person to repay this credit.
  • The principle of solidarity : All household debts contracted by only one of the spouses are the responsibility of both spouses, unless they are deemed excessive. So even if your partner has obtained a loan to finance your child education when you were not yet divorced, you must help them pay the debt.


What then are the solutions for your credits in the event of divorce?

What then are the solutions for your credits in the event of divorce?

  • You divorce by mutual consent, you still get along with your former partner, then it will be easier for you to continue to pay together . Finish paying off all of the “household debts” both.
  • Repay your credits in advance so that you no longer have to pay credits with your former spouse. For this, either you have the money necessary following an unexpected inflow of money (inheritance, premium, …), or you go through another personal loan to pay the total amount you owe.
  • Do you prefer to keep your house? Make a deal with your ex and buy his share .
  • If you feel that you are going to have too many credits to manage, consider grouping credits. All your credits will be combined into a single lower monthly payment which will allow you to have cash and be able to finance a project. Do the calculation yourself easily on our credit pooling simulators.

The main difficulty in answering the question “I am divorcing, what is going on for the credits in progress? Comes from the matrimonial regime. It is he who will define if you must help your former partner to repay his debts or if you have no obligation to do so. Your notary or lawyer can help and inform you. Be careful not to take out credit in connection with education or your household until your divorce is not pronounced otherwise you will cause your ex in his repayment.

The advantages of buying back special owner credits

In the event of a difficult financial situation, the repurchase of owner loans is a solution allowing the owners to reduce their monthly payments to increase their room for maneuver in front of their expenses. What is the repurchase of credits for owners? A financial solution that combines the owner’s credit (s) with a single credit with lower monthly payments.


What you need to know about buying back special owner credits?

credit loans

An owner who would have cash flow problems, or who would have several credits in the process of being reimbursed, or even an owner who would like to carry out work can decide to restructure his credits: his current loan (s) are bought back, or grouped together, and the owner no longer has to pay the x monthly payments corresponding to the x current credits, but only one monthly payment corresponding to the new credit grouping together all the old loans in progress.

We are talking about repurchase of owner credits, or grouping of owner credits, or even restructuring of owner credits.


The advantages of buying back special owner credits are as follows:

debt loans

  • When you choose to buy a homeowner credit, you have only one contact: the financial advisor of the homeowner loan buyout company you have contacted. You no longer need to “juggle” between the different contacts of your different current credits.
  • With a buyout of owner credits, you pay only one monthly payment per month. Thus, managing your credits is much simpler and a single repayment each month is enough.
  • When subscribing to your credit combination, you can negotiate to pay a single monthly payment that is lower than the sum of the monthly payments that you paid before for your various outstanding loans. It is actually possible to reduce the amount of the monthly repayment of owner loans
  • In fact, thanks to the decrease in the amount of the monthly payment, your purchasing power increases: your available income after repayment of the owner credit repurchase and after payment of your monthly charges are higher than before the credit repurchase…

All the advantages of buying back credit for homeowners should not make us forget that it is essential to manage your budget well, especially since if buying back homeowners credit reduces the monthly payments, there are also disadvantages to take into account. account. For example, the repayment of credit is made over a longer period, thus generating a higher cost of credit.