Necessary to be granted a home loan, mortgage insurance is an important part of the overall cost of the loan. But it is possible for everyone to reduce the cost of this insurance by resorting to the delegation of insurance. Indeed, making a change of credit insurance saves up to several thousand euros and take advantage of guarantees that are more suited to his profile.
Make a comparison of loan insurance offers
Since the implementation of the Congilaw company, in 2010, which gives the borrower the possibility of contracting his mortgage insurance outside the lending bank (ie not accepting the group contract in favor of insurance individual borrower) and the implementation of the Mahon law, allowing the insured to make a change of insurance during the first 12 months of the contract, the freedom of consumers is favored.
To satisfy any type of profile, new offers have been developed and competition has increased. If all contracts contain mandatory collateral, others may also include optional collateral, which then fits the borrower’s profile.
The mandatory guarantees for a home loan financing the purchase of a principal residence are the death guarantee.They allow the borrower to benefit from coverage in the event of disability as a result of an accident or illness.
Choosing a borrower insurance policy is essential to be well insured. It is therefore appropriate that the latter contain guarantees that are very well adapted to the profile of the borrower. It is therefore recommended to compare a maximum of proposals in order to choose the one that is the best in terms of guarantees but also the cheapest.
Note that the bank can not refuse a change of insurance contract if the new contract includes guarantees at least equivalent to those of the initial contract.
To save time in your search for the best mortgage insurance and reduce the cost of your loan in an optimal way, we advise you to go through an insurance broker. Indeed, the latter knows the market perfectly and will quickly show you the most suitable contract for your profile, just like the one with the lowest price. Note that the broker is responsible for you various steps relating to the change of borrower insurance. Indeed, once your new contract has been selected, it must be sent to your banker to review and verify that the equivalence of guarantee is respected. The broker takes care of this step for you. With the loan insurance broker, you make sure to play the competition, thanks to a comparison of the best offers on the market.
Subscription to a new loan insurance contract
Once the new borrower insurance offer is found, you need to contact the insurer. This will give you a form including a health questionnaire to complete. It is imperative to answer accurately and honestly. This allows the insurer to take notice of your profile to put in place the appropriate guarantees. According to the answers given as well as the amount of the mortgage loan, the insurer may require the passage of a complementary medical examination. It is then that the insurer will validate or not your membership. To formalize the membership, it sends you a form to sign that you must return by registered mail with acknowledgment of receipt.
Termination of the old insurance contract
After the new contract has been subscribed, steps must be taken with the lending bank to confirm the acceptance of a delegation of insurance. It will verify that all conditions are met, including the notion of equivalence of guarantees. Also, for the change of insurance to be accepted, you must be careful to respect the notice.
In case of borrowing less than a year
If the real estate loan is less than 12 months old, the Mahon law allows you to make a loan insurance change. For this, it is necessary to send a registered letter with acknowledgment of receipt no later than 15 days before the end of the 12 months. In case of non-compliance with the notice, the insurer may refuse the change of insurance.
In case of loan of more than one year
Applicable since January 1, 2018, it allows any borrower to take the time to find a more advantageous insurance offer than the current contract. To change the offer, you must send the current insurer a registered letter with acknowledgment of receipt at least two months before the expiry date of your contract. You must also indicate in the mail the effective date of the new contract accepted by the lending institution.