Not very widespread in France, unlike the Anglo-Saxon countries, the mortgage loan consists in mortgageing a property with a bank. In return, the latter grants a loan to the owner of the property. It is a guarantee on property that you plan to acquire or that you already own.
In short, mortgage credit is suitable for borrowers with substantial real estate assets, who wish to obtain liquidity, without giving up ownership of their property.
If you can no longer pay off your loan, the bank is free to seize the mortgage in order to auction it off and pay off your debt.
While guarantees are an integral part of the mortgage loans usually offered (in order to prevent payment defaults), there are actually two types of guarantees:
- The personal guarantee includes structures such as the home loan, which analyze your file to verify your repayment capacity . These structures study your file independently of the banks. They are able to repay your loan in the event of defaults.
- The real guarantee, which corresponds to a guarantee taken on real estate. This is the mortgage. This guarantee may also take the form of a registration of a lender’s lien .