To optimize my loan request, Meilleurtaux helps me prepare the application for the bank in advance, with all required supporting documents.

 

When I purchase my future property, banks will ask for a guarantee on the financed property. If problems occur, they can re-sell the property to recover the funds they made available. I have four alternatives for this guarantee: mortgage, lender's lien, surety and civil servant mutual insurance.

 

Advantage The principle agreement: After the application has been reviewed and my solvency verified, an offer known as the "principle agreement" is sent. At this stage, this agreement is not yet definitive; I still need confirmation from the deposit organization and insurance company.

Mortgage

Mortgages guarantee payment of my real estate loan without my being evicted. If I apply for a mortgage, I accept to pay high fees. Mortgage charges represent approximately 2% of the loan amount. I contact my notary if I wish to apply for a mortgage.

Lender's lien

Lender's liens work like a mortgage. They must be included in a notarized deed and registered in the Mortgage Registry within two months of the sale. In the event of financial difficulties, the property will be seized and sold.

GOOD TO KNOW:
A lender's lien is more advantageous because it does not involve registration fees nor land development taxes. It only applies to older properties.

Surety company

A surety company replaces the bank when it comes to protecting against the borrower's risk of default: it provides a guarantee for the bank, not the borrower. This option is advantageous for both me and my bank. It guarantees my property, and in return, I pay a contribution that is proportional to my loan amount to the surety company once the funds are released.

Civil servant mutual insurance is only available to government employees (Ministry of Education, Treasury, Atomic energy, Police, Justice, etc.) and some other specific activities.

Advantage If given the choice, I'd most likely opt for a surety company. Surety companies offer flexibility and savings. Of course, I compare the terms offered by various companies before making a decision.

Example of costs (estimations)

Once I have selected my future banking establishment, I open an account to receive my funds. (This step is not compulsory but generally required by banks.)

Loan amount Mortgage charges Lien fees Surety fees
€150,000 €2,434 €1,017 €1,815

GOOD TO KNOW:
It is entirely possible to keep your account at your current bank and take out a loan from another bank. Your bank handles the necessary transfers.

You are committed to reimburse your mortgage Loan. Verify your ability to reimburse before committing.