You want to borrow a sum of money to buy a kitchen, or finance the acquisition of your veranda for example, to buy a house or to carry out renovations.
In addition to the usual acceptance conditions, your broker will check your solvency and require guarantees.
When the amount borrowed is significant – beyond €25,000 – it may happen that your broker requires the creation of a mortgage on a property of which you are the owner free of charges. This is almost always the case when purchasing real estate. Of course, there are costs associated with setting up a mortgage.
Are there any alternativesem , to taking out a mortgage on one of your real estate? This is what we are talking about today.
What is a mortgage?
The mortgage is a real property right which is often granted by the borrower in order to guarantee the repayment of a sum of money that he has borrowed. This is a comfortable guarantee for the creditor insofar as real estate is property which maintains a stable value and which even tends to appreciate over time – barring extraordinary situations.
Are there alternatives to taking out a mortgage?
Of course, the borrower can always offer other guarantees. We immediately think about the guarantee or the addition of a guarantee. Other more original alternatives are sometimes proposed, such as the redemption of pension savings or life insurance.
Note that for these latter cases, the beneficiary of a pension savings or life insurance which buys back its rights before the end of the contract is rarely a good deal. In general, the early surrender value is very unfavorable.
In certain cases, guarantees are taken on movable assets (securities accounts or savings accounts).
Effectiveness of these alternatives ?
The success of these alternatives is very average because generally the resulting solvency is problematic and when the sums borrowed are very large, the bank will not be satisfied with random guarantees.
