The mortgage bank guarantee in case of non-payment-The mortgage is a contract between a bank and its debtor client. It is a way for the bank to recover its unpaid debts and the debtor a sign of commitment. The mortgage is always on real property which the debtor is the owner. A bank offers its customers to make a deposit but most requested is funding. At the request could be accepted or not, the client must be a record.
In the case of a favorable response, the bank makes a loan to the client. Since this is a for-profit institution, the bank seeks both to help and to make profits. By lending money, she is at risk because the amount loaned can not be refunded. That’s why she asks for guarantees that will be his recourse if the borrower does not pay its debts. There are different kinds of guarantees depending on the nature of the loan, the amount and nature of the property as security. A mortgage is one of the most common forms of collateral. Before committing, you must have a basic understanding of the consequences of the mortgage.
The mortgage may be a loan guarantee for the purchase of real estate. In this case, the property purchased itself serves as collateral for the bank. The mortgage may also guarantee a loan for another use. Warranty then covers real property which the borrower already owns. Whatever the nature of the loan secured by a mortgage, the involvement of a notary is always required to draw up the mortgage. This act must be a record at the mortgage and fees are the responsibility of the debtor. In the case of a loan whose maturity is determined, the registration is valid for up to two years from the due date. But if it is not well defined, the validity of the registration is ten years unless it is renewed.
The bank’s rights
With the mortgage, the bank has the right to seize the mortgaged property if the debtor fails to honor its debt and the property will be sold. The price used to repay borrowings from the bank, even if the debtor has other creditors. In case the mortgaged property have changed hands, the bank can still exercise his right to sell the property and be reimbursed. All these rights are subject to the requirement of prior registration of the mortgage.
The debtor’s obligations
To cancel the mortgage on his property, the debtor must meet the deadline to repay the loan. Otherwise, he has to give up his ownership of the mortgaged property. If it happens before the deadline, the debtor transfers his property to another, it must make what is called “release”. This is the cancellation of the mortgage on the property. This procedure allows the new owner to ensure that the bank seizes the property, in case of non-payment. The fee for this procedure are borne by the debtor. However, it is important that the bank agrees to waive the mortgage.
The negatives of the mortgage
It is certain that the mortgage has advantages for the bank and the debtor. It does have the possibility of being granted the loan. But if he is so keen on his property, he runs the risk of being dispossessed, if it fails to honor its commitments. The debtor must always expect this possibility, since it can not predict what life holds. The fee for the mortgage may be costly for the debtor. Indeed, the cost calculation is always based on the loan amount secured by the mortgage. To get an idea of what we could pay, we must consider the fact that the costs are as follows: from 0.60% for the publication fee land, to pay the 0.05% Conservative, notarial fees vary depending on the loan amount, the tax stamps and other fees to pay. Generally, the amount payable is 2% of the loan amount.