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 Real estate loans

 

Most banks grant loans and the specialized financial institutions have set up and introduced  the most "sophisticated " formulas.

Their term is freely established with  the lender. It usually lasts about 20 years but nowadays can last until 30 years or more.

There are a number of different types of loans, each bank or financial institution has its own. However, you have to keep in mind that for a few years these institutions have shown a lot of skills to set up new solutions to better fit to each borrower's individual case.


1) The interest rates :

 

a) The fixed rates :

Benefits : The safest solution for "long term", fixed rates are as expected.

b) The variable rates :

Unlike the fixed rate loans, they are updated on the dates specified on the loan offers according to the fluctuation of the monetary indicators. The Euribor is the most used monetary indicator. They can be Cape or not.


2) The different types of real estate loans  :

 

In France, a lot of different real estate loans are proposed. Each one is specific to the borrowers' to the socio-professional category. The main types of loans propsoed to households are unregulated loans, social home ownership loans (PAS), contractual home loans (PC), Building saving loans (PEL), the Zero-interest loans (PTZ). It should not be forgotten the grants given by the ANAH, some public agencies, and some departments.


3) The research of the best loan

 

The bank loan offer consists of an annual interest rate offer for the real estate loan, an insurance rate, fees and a guarantee. Usually , these elements are included when calculating the percentage rate of charge (TEG). An out of quota rate such as the time for the release of funds or the geographical proximity of the bank must be added to these criteria.


4) Preparing the estate loan file 

 

To set up your real estate loan, the credit agencies will require different elements to determine your borrowing profile.

More information :

The file can be divided into different parts referring to :

  • Your identity: The National Identity Card, Resident Card for foreigners living in France.
  • The financing purpose : The Ownership Certificate, preliminary sale agreement, property specifications.
  • Family income registration : Certificate of employment, pay statements, official receipts, extracts from the bank accounts.

This list is not of course exhaustive and depends on your buyer's profile.


5)  Real estate loan insurances :

 

a) Death insurance 

Death insurance enables the reimbursement of all or part of the remaining sum dues by the insurer, according to the percentage of cover chosen  at the time of the subscription of the death insurance contract in the event of the insured partly's death.

b) Compensation for total temporary disability (ITT)

ITT : Total temporary disability  ou IJ daily subsistence allowances

The allowance is fixed when  signing  one's contract and aimed at completing one's income in case of disability to work.

A medically -certificate impairment which recognises the complete and continued disability owing to a disease or an accident to devote oneself to any professional activity producing any profit.


c) The irrversible loss of autonomy insurance (PTIA)

This insurance is associated to the death benefit guarantee. It is usually called 100 %  third category Invalidity.

The complete and continued disability  to devote oneself to any professional activity producing any profit and which requires to get assistance from a third person for one's basic living needs.


6) Supplementary insurances

 

a) Job-loss insurance (or unemployment)

This insurance is generally optional and can be implemented under specific conditions like the age and the unintentional job-loss. It is generally linked with ASSEDIC benefits or equivalent benefits. Services :the partial payment of the loan tenors, within limits and for a contract with a defined end - date.

 

b)   The insurance Guarantee Resale  

This guarrantee aims at compensating the possible financial loss suffered by the insured or one's beneficiaries in case of the property resale within a set time owing to some events such as :

  • Death (due to a disease or an accident)
  • Disability  (due to a disease or an accident)
  • Divorce
  • Job loss owing to the insured's redundancies on economis grounds  Perte d’emploi consécutive à un licenciement économique de l’assuré,
  • Mutation professionnelle….


c) Damage to works insurance

The damage to works insurance aims at ensuring the payment of the damage suffered (except for reponsability research).

Regulation. The law of 4 January 1978, called Spinetta law, has instituted obligations for the builder as well as for the individual:

  • For the builder: it must cover its liability 
  • For the individual: must purchase a damage to works insurance

This insurance is effective, not only for the facility owner, but also for the successive owners.
This damage to works insurance must be underwritten before the beginning of the construction, so as for the warranty to start at the end of the works, ( that is to say one year after the reception of the construction, justified by a signed formal record of receipt) until the end of the 10-year period (10 years after the reception of the construction). 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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