Assurance emprunteur

Borrower insurance: mandatory or not? – Challenges

When getting a home loan, several questions always arise. How can I save on my mortgage? How do you get an attractive price? Here are two basic and frequently asked questions. The other thing is to question whether the borrower’s insurance is mandatory or not; The answer is simple, legally there is no obligation to obtain borrower insurance as part of the real estate purchase process. Having said that, we have to look reality in the face. Concretely, banks are very reluctant to grant a mortgage without insurance to the borrower. This does not prevent you from trying your luck and going around the banks to see if someone agrees to finance your project without insurance, but the chance of this succeeding is slim. On the other hand, do not forget that since 2010 and the Lagarde Law, your borrower’s insurance contract can be signed with an insurance company that is not your bank, which may allow you to make some savings, provided that said contract offers levels of security at least equivalent to those offered The bank that gives you your mortgage.

There are solutions to dispense with the borrower’s insurance

Borrower insurance Covers you in the event of permanent disability (partial or total), death, temporary incapacity for work, or even job loss. So they are a strong guarantee for banks, but they can sometimes accept other solutions, starting with guarantees. In concrete terms, a pledge is a guarantee that you provide to the bank by way of real estate or movable property, or even financial investments, most often life insurance. Note that to get an agreement, you must provide a strong and reliable bank file. The other possibility, the collateral, that is, the fact that a third person acts as the guarantor of your mortgage. In general, the guarantee is provided by a relative, most often a family member, but it is also possible to contact the so-called mutual guarantee organizations. Finally, if you already own one or even better, several properties, you can apply for a mortgage without borrower insurance as part of the mortgage. Be careful though, if you don’t pay, you will lose the pledged item.

Borrower insurance, advanced system

Since February 17, 2022 the borrower’s insurance system has undergone significant legal changes that should be known. First of all, the law now provides you with the possibility to change the insurance company at any time, which makes it possible to find more attractive rates (provided that you have at least equivalent guarantees). Another important change, it is no longer mandatory to complete a health questionnaire if the mortgage amount does not exceed €200,000 for an individual or €400,000 for a couple. Note that this procedure only applies if the contracted mortgage loan is due before the participant reaches 60 years of age. Finally, the time limit for the right to be forgotten was reduced from ten years to five years. Thus, people who have fallen victim to a pathology (cancer for example) or an infection no longer have to report it five years after the end of the treatment protocol.

(by HREF Editorial Board)

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