WHAT IS A MORTGAGE : DIFF BETWEEN BOND AND MORTGAGE ?

WHAT IS A MORTGAGE : DIFF  BETWEEN BOND AND MORTGAGE ?
WHAT IS A MORTGAGE : DIFF  BETWEEN BOND AND MORTGAGE ? 

We often talk about mortgage for real estate. We do not always know the difference with the deposit. Reminder and definitions.

THE ESSENTIALS ON THE MORTGAGE

The mortgage is a guarantee for the bank . It allows the establishment to proceed with the resale of the acquired property, in case the borrower becomes defective for the payment of the monthly payments.

In this case, the creditor proceeds to seize the property for sale. This makes it possible to recover the amount borrowed for the bank that uses judicial auctions.

The mortgage has two forms: the conventional mortgage and the PPD (lien of money lender).

WHAT IS THE CONVENTIONAL MORTGAGE?

The conventional mortgage is granted by a banking institution. For its part, the borrower subscribes to this type of mortgage of his own free will.

 This is noted by an authentic deed before the notary. It is registered in the Mortgage Retention of the city where the building is located.

WHAT DOES THE PPD INCLUDE?

Unlike the conventional mortgage, the PPD is a real safety. With the PPD, the money back guarantee is made on the property.

For the PPD, the bank applies the process of entering the property in the event of non-repayment of credit. In addition, it is paid in priority.

The mortgage and the PPD require a subscription to the notary. Nevertheless, the PPD is a guarantee of already existing goods.

 The PPD is not feasible for a purchase on plans or for the construction of a house, unlike the mortgage.

In addition, the cost of the PPD is lower than the mortgage. Indeed, this device is not subject to the tax of land registration. In practice, bankers prioritise the PPD.

WHAT IS THE DIFFERENCE WITH THE DEPOSIT?

A deposit is also a guarantee. A bonding agency approved by the "lending" bank guarantees repayment.

This organisation acts on behalf of the borrower. If the borrower is in default, the surety agency will reimburse the bank. On the other hand, the guarantee contract does not require any signature in front of the notary.

The bond comes in many forms:
  • The mutual guarantee company is based on a loan guarantee associated with a pooling of risks. Coverage includes the purchase of a home, a piece of land or even the completion of work.                                                                                                                                                     
  • The "mutual servant" surety sometimes offers a free loan guarantee and its mode of operation is similar to that of the mutual guarantee society.                                                                                    
  • The joint guarantee of an individual is rarely accepted by banks.
In general, the mutual guarantee is preferable to the mortgage . The mutual guarantee implies a 100% repayable contribution and sometimes a commission.


In addition, the procedure is not as binding as the mortgage. Before foreclosure, the fragile borrower can take advantage of solutions like debt rescheduling.

 Finally,

 the deposit is 75% recoverable by the subscriber at the maturity of the loan.

thanks for the time.

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