this essential tool when buying real estate

There are two types of surety insurance: joint surety or mortgage surety.

Like the already existing devices to guarantee the payment of rents, there is also a guarantee intended to ensure the payment of a credit term. And this in all circumstances, including if you cannot afford the payment. In such cases, an intermediary organization will take over, explains Challenges. Surety insurance is therefore a solution intended to protect banks.

Two types of surety insurance

There are two types of surety insurance: joint surety or mortgage surety. For the first method, any person can stand surety for the borrower (a legal or natural person, whether or not they are related to the borrower. In this way, the bank can rely on the guarantees the surety to certify the solvency of the one who occupies this role. As regards the second, the surety takes the form of a good, and not of a sum of money. Also, if the maturities are not correctly reimbursed by the borrower, the lender will seize his property.

But then how to choose your surety insurance? Since 2014, surety organizations have truly proliferated. All that remains is to compare the different devices on offer. In particular with regard to the rate of the guarantee, the sum to be reimbursed in the event that no incident would disrupt the progress of the loan. You also have to pay attention to the subscription fees. As a general rule, a surety center exists within each bank.

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