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Redeeming real estate credit without changing insurance

To buy back your mortgage implies to sign a new contract and necessarily to change insurance, can one still preserve his insurance in this operation? Explanations.

Real estate credit and borrower insurance

Real estate credit and borrower insurance

When a borrower subscribes to a mortgage, he will also take out a borrower insurance to cover the repayment of his monthly payments in the event of death, illness or disability, he may also add additional guarantees such as unemployment. Often, it is not easy to find good insurance and even less to return by the questionnaire of health, that is why some borrowers wish to preserve their insurance during a renegotiation of loan or repurchase of mortgage.

Simply, the borrower insurance contract is closely linked to the real estate loan and even inseparable, except in the case of a renegotiation of a home loan that consists of simply making an amendment. Otherwise, in case of repurchase of an outstanding mortgage loan by a bank, the borrower insurance is also bought back since it is based on the remaining amounts to be refunded and especially on the initial contract.

Buy a home loan without insurance

Buy a home loan without insurance

There are several reasons to buy a home loan, the first being to take advantage of current market rates to hope for savings on the repayment of interest, a result made possible at the beginning of repayment of a home loan but not at the end. Banks and credit institutions must therefore be solicited to obtain an attractive repurchase offer. This can be done through an online financial comparator, a form that delineates only establishments that can meet the applicant’s need.

The second reason may involve a credit redemption is to collect a mortgage with one or more consumption credits, the interest is rather to reduce the amount of monthly payments to rebalance the budget, the operation seems identical to the previous except that this last offers a different result. In both cases, the subscription of a new insurance will be necessary to cover the new loan because a repurchase of mortgage will imply to repay the initial loan by anticipation as well as the related expenses.

Simulate a home loan buyout and insurance

Simulate a home loan buyout and insurance

It is always useful to know that a mortgage loan insurance can be subscribed independently of the repurchase of credit, that is to say that the borrower can apply to an insurance company to get an insurance offer loan, it will simply need information on its loan repurchase agreement (amount, duration, rate). It is therefore necessary to start by simulating a mortgage repurchase and then simulate a borrower insurance, so it will be easier to compare the offers and choose the best option for each of the formulas.

Good to know: it is possible to change borrower insurance for one year from the date of subscription and then on each anniversary date, so you have the opportunity to buy better credit insurance at any time, without leaving all his feathers.