The object of the borrower insurance is the assumption of certain life events that affect the settlement of the mortgage. Among the principal guarantees covered by the loan insurance are death, disability, unemployment or incapacity for work. Once triggered, it allows the deferment of the monthly payments, or even their assumption of responsibility, according to the terms of the contract.
But there are some populations for whom access to home loan insurance is difficult, as borrowers with an increased health risk. Alternative guarantees, offering the same security as the borrower insurance, can then be put in place.
1. Mortgage of real estate
The mortgage concerns a property belonging to the borrower himself or to a third party. It can be a second home, a rental housing… So, in case of difficulties, the property can be entered by the lending institution and placed as collateral for a sale. The amount used to cover the repayment default.
2. The bond entered into by a natural person or an organization
Being a guarantor means agreeing to repay the amounts owed by the borrower in the event of default. The bond is therefore a guarantee that binds both the lending institution, the borrower and the guarantor, natural person or body.
3. The pledge of a portfolio of securities or life insurance
The pledge is a financial guarantee (shares, bonds, life insurance, etc.) that the borrower or a third party gives to the lending institution, without losing ownership. In case of default to repay the mortgage, the bank can then use in this capital, sometimes placed in guarantee on a special account.
Be aware, however, that an increasing number of insurers agree to cover people at risk of aggravated health. In addition, the so-called PERTAS convention (insuring and borrowing with an aggravated health risk) provides that your application for borrower insurance, under standard conditions (ie without any tariff increase or exclusion of guarantees), can be studied at three levels, before referring you to an alternative guarantee.