Loan insurance: which choice for a couple of seniors?
When the children have left home or retirement time has arrived, a senior couple is often called upon to move. Direction an apartment in town why not, or a villa near the sea while you do! To balance his budget, he may need a mortgage and therefore loan insurance. A question that is sometimes delicate and feared by senior co-borrowers.
A pleasure purchase at retirement
Here are two seniors who sold their vast 4-room apartment to Rodez at a price of $ 140,000: they have always had the project of settling near their children in Montpellier, in a new comfortable residence. But this comes at a price: $ 240,000 for a three-room apartment. It will therefore take a loan of $ 100,000 to cover the difference, which corresponds to monthly payments of $ 600 excluding insurance on a 15-year mortgage at 1.10% according to a simulated mortgage loan insurance put at your free disposal.
Two options available for borrower insurance
The situation has changed since their last purchase in the 1990s. Since the Lagarde law of 2010, it is no longer compulsory to take out mortgage loan insurance with the lending establishment. Insurance delegation may therefore be called upon to bring competition fully into play and benefit from competitive offers. The only constraint then being to benefit from the minimum guarantees required by the lending organization (generally the death guarantee, and total disability).
Why the group contract is not the ideal solution
Faced with the many steps required to take out a mortgage, many senior borrowers forgo competition for their loan insurance, automatically subscribing to group insurance from the lending institution. A solution which is certainly simpler and faster, but which is based on a pooling of risks taking much less into account the specificities of each borrower: the guarantees and costs are uniform for each type of subscriber.
Insurance delegation: significant savings!
Above all, using insurance delegation is getting a personalized proposal at an adjusted cost. Besides that the insurance premiums are then based on the capital remaining due and not that of the total amount borrowed, the borrower insurance subscribed by delegation sees its monthly payments decrease over time. This formula takes into account the specific health of seniors, and allows you to borrow after 65 years or to extend the repayment period beyond 70 years.