Choosing loan insurance other than that proposed by the lending institution is an option that is widely used in real estate loan buyback operations.
The delegation of insurance can allow great savings
At a time when mortgage loans are set to establish a new production record (more than 250 billion euros) for the year 2017, borrowers must keep an eye on all financing conditions. Although low-interest rates benefit thousands of borrowers, they must be careful to find the best home loan insurance. Indeed, this hedge can represent up to 30% of the total cost of financing, ie several thousand euros. In order to limit its amount, it is possible for borrowers to choose the company with which they wish to subscribe to their loan insurance. This is the insurance delegation.
Thanks to this provision provided by the Lagarde law, borrowers are no longer obliged to contract their insurance with the lending bank (group insurance). In general, group offers can represent an amount ranging from one to two times, or more, compared to an alternative offer. The delegation of insurance and the future annual termination extended to all mortgage credit agreements are not known to all borrowers in France.
The purchase of credit gives pride of place to the change of insurance borrower
At the dawn of the generalization of the annual cancellation thanks to the amendment Bourquin, a recent study makes a point on the behavior of the French vis-à-vis the choice of their insurance-borrower. First of all, the insurance delegation is mainly used during a repurchase transaction. With this banking operation, borrowers redeem their home loan from another bank with the intention of reducing the initial rate. On this occasion, the change of insurance makes it possible to optimize the new financing.
7 out of 10 delegations take place as part of a loan buyback. The change of insurance can also occur in a period of 12 months after the signing of the contract, it is the Hamon law which concerns only 18% of the delegation files. Finally, for the 13% of remaining delegations, they intervene during the real estate purchase. The best-informed are those who already have a loan in progress. With experience, they are becoming more aware of the importance of insurance in their real estate financing.