Changing Mortgage Loan Insurance: When and How?

Changing Mortgage Loan Insurance: When and How?

by Charlotte Bedon June 14, 2022
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Although there is no law requiring the purchase of mortgage loan insurance, in practice it still exists Obligation for anyone wishing to receive credit.

By imposing it, the banks offer themselves a guarantee of compensation in the event of incapacity, disability or death. This coverage often comes at a significant cost. Luckily, By the Lemoine Law of February 28, 2022And the Changing a borrower’s insurance becomes easier. To learn more about the measures applied, that’s right In the first part of this article.

Concretely, the steps for concluding a new contract are simple. After comparing the different offers and choosing the most suitable oneit is necessary to download a file.

The insurance authorization letter must then be sent to the bank. Finally, it will be necessary to wait about ten days to receive the latter’s decision and terminate the old contract. We detail all this in the second part of this article.

To learn all about the change in mortgage insurance, the Lemoine Act procedures, the steps to take, as well as refer to our standard letter to send to your bank, continue reading this article.

Changing Mortgage Loan Insurance: Changes in 2022

age Lemoine Law of February 28, 2022 accompanied by Radical changes in home loan insurance for consumers. Focus on these simplifications!

Possibility to change the borrower’s insurance at any time

End of the health questionnaire with certain conditions

All borrowers had to comply with The imperative of a health questionnaire. Intrusive and discriminatory, and today it is on the verge of disappearing.

In fact, from 1Verse June 2022, this document will not be necessary if :

  • The loan is less than €200,000 for a single person or €400,000 for a couple;
  • The total repayment of the said loan is scheduled before 60eBorrower’s birthday.

By this scale, Future policy holders considered ‘at risk’ For health reasons it is no longer necessary to tolerate the voluntary increase in their contribution or the various and varied exceptions.

The period of the right to be forgotten has been greatly reduced

The advantages of changing a borrower’s insurance are manifold. Closer to your needs, more suitable for your current situation and health, more economical … By signing up for a new home loan insurance contract with another insurance company, you have a lot to gain. Here’s how.

1. Compare Home Loan Insurance

Before proceeding with the selection of a new insurance company, Remember that Price shouldn’t be your only criterion. It is also necessary to take into account the extent of the guarantees provided. And for good reason, your bank’s acceptance of this termination is a sine qua non: your new contract must offer the same level of guarantee as your old contract.

to do this, you can Rely on the consolidated information sheet (FSI) detailing the criteria used and the minimum collateral required by the bank to secure your mortgage. That last one was for you Discount from the first simulation of your balance. If not, feel free to turn to your bank to pick it up. It will serve as a basis for comparing the different proposals.

Other criteria to take into account : Warranty exceptions, but also the quality of customer service. Also, beware of contracts whose premiums can be reconsidered, which can lead to unpleasant surprises.

to simplify your life, Use a home loan insurance comparison such as Magnolia. It may be useful Since you will receive personalized offers based on your profile with just a few clicks.

Once you are selected, You will have to start preparing your file.

2. Prepare your file with all the documents required to be provided

3. Termination of the borrower’s insurance with a standard letter

Did you receive your new insurance contract? Iit’s time for Request an authorization from your bank. For this, a registered letter must be sent with acknowledgment of receipt. For the latter, a copy of the proposed new contract will be attached as an alternative.

This is a typical message :

[Nom et Prénom]

[Adresse]

[Code postal et ville]

[Téléphone]

[Nom de l’assureur]

[Adresse]

[Code postal et ville]

to me [Lieu]The [Date]

Reference: Insurance Contract No. [numéro de contrat]

Subject: Request to terminate the borrower’s insurance contract

ladies and gentlemen,

Hereby, and as permitted by the Lemoine Act of February 28, 2022, I am informing you of my desire to terminate my Mortgage Loan Insurance Contract No. [numéro de contrat] Subscribe to your company [date de la signature du contrat de prêt ou de la prise d’effet de l’assurance].

Subject to the terms and conditions of this contract, the termination of this contract shall take effect on [date].

Knowing the basic nature of insurance to cover my mortgage, I chose new borrower insurance with equivalent guarantees. Attached is the Lender’s Agreement with respect to this authorization and ratification of this new contract.

Thank you in advance for confirming that my request has been considered, as well as for the attention paid to my file.

Please accept, madam, sir, an expression of my esteemed sentiments.

Signature

4. Wait for your bank’s response

The bank has no There is no obligation to validate your request to change the borrower’s insuranceIt has every right to object to it if it is justified.

In any case, your mail will not remain ink on paper: The bank has a period of 10 working days to inform you of their decision.

  • If you refuse: This decision must be inevitable justify Indication of lost or unqualified information and/or warranties. Your initial insurance contract will not be terminated and will remain in effect until you submit a new application.
  • If you agree: The bank will send you an attachment to offer the loan. she goes Recalculate your total effective loan rateThe latter no longer includes the cost of insurance. Note: He is not entitled to adjust the initial loan rate (whether fixed or variable) to make up for any shortfalls or conditions that appear in your offer. It cannot charge an amendment fee, analysis fee, or authorization fee.
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