The mortgage serves as a guarantee to the credit institution that grants a mortgage loan. Without this, it is almost impossible to get funding.
But if the mortgage is so to speak mandatory, it is important that the borrower know everything about this guarantee because it is a commitment not to be taken lightly.
About the mortgage
There are several types of mortgages but in the case of a mortgage, it is called conventional mortgage because creditor and debtor sign a contract in which it is stipulated that a property is assigned to the guarantee of the loan that makes the property. ‘object of the contract.
Require a mortgage is completely legal and article 2393 of the Civil Code says this: “The mortgage is a real right on the buildings assigned to the discharge of an obligation”.
This real right relates to the value of the property rather than the property itself and the owner can live in the building, transform it or even rent it.
It should be noted that in order to be able to mortgage the building that serves as family housing, the consent of both spouses is mandatory under Article 215 of the Civil Code.
The steps to establish a mortgage
To be legally valid, a mortgage deed can only be established by a notary.
If the mortgage is for the purchase of an existing building, the notary will verify the title of the seller to ensure that it is free of mortgage.
He will also prepare the documents necessary for the publication of the mortgage deed in the files of the land registration service, which now replaces Mortgage Retention.
This registration makes the mortgage enforceable against third parties, that is, if a subsequent creditor consults the records, he sees that the property is already mortgaged and that he may only take a new second mortgage. , therefore not a priority.
The inscription also prevents the building from being sold without the first-ranking creditor knowing it.
The administrative fees and notary fees are borne by the buyer as well as the fees charged by the advertising service.
What happens to the mortgage when all is well
If the debtor honors his monthly payments, the mortgage terminates on his own one year after full repayment of the loan.
In case the buyer decides to resell the building while the loan is not yet fully repaid, no problem. The credit institution first receives the amount still owed to it through the notary who, again, is called for the constitution of the deeds.
And again there are fees and notary fees to be paid to which are added the costs of cancellation of the mortgage requested by the service of land registration, which fortunately are lower than at registration.
And when that’s wrong …
In the event of failure to pay monthly installments due for a mortgage loan, foreclosure is not far off, but the creditor must respect certain steps.
He will first ask a bailiff to issue a summons to pay the arrears within 30 days. The borrower can try to negotiate a spread of debt or decide to sell the building.
If the creditor is not paid, he sends the usher again but with a command to pay worth seizure. The debtor can still sell his property but only with the agreement of the judge of the district court responsible for the file.
This payment order is published by the advertising department to warn other potential creditors.
The last step is the auction of the property for which the judge sets a minimum selling price.