In France, almost one in three individuals repay a mortgage, according to an OpinionWay survey carried out in March 2020 for the broker network Vousfinancer.com. However, committing to pay nearly 1,000 euros each month to your bank to afford the house of your dreams is far from trivial. Who can say what their financial situation will be in two, five or ten years?
In the event of a drop in activity, unemployment or a disabling accident, it can become difficult to pay off your debt. The first reflex should then be to contact your bank advisor to find out what payment facilities are provided for in your contract. Certain provisions indeed make it possible to face such situations.
Lower your monthly payments
A bad economic situation is enough to jeopardize a professional activity. You are self-employed, micro-entrepreneur or liberal professional and you know that your income will decrease? To limit the damage and avoid ending up in the red, you can use the modulation clause, in principle provided for in any mortgage. It is also very useful if you have been placed on partial unemployment as an employee.
This provision allows you to ask your advisor to temporarily lower the amount of your monthly repayments, in order to best adapt them to your new situation. Depending on the conditions specific to your bank, you can reduce your monthly payments by 10 to 30%. In most cases, this clause can only be activated after one to two years of effective reimbursements. Likewise, this reduction in your maturities is necessarily accompanied by an extension of the total duration of your loan. However, lending institutions limit this duration to a maximum of two years. Please note that this operation may result in administrative costs.
Suspend monthly payments
Certain hard times can completely deprive you of the majority of your income and prevent you from supporting yourself while continuing to pay your loan maturities to the bank. When the reduction in monthly payments is not enough, you can request their outright suspension.
If, here again, everything depends on the general conditions of sale of your contract, be aware that the mortgage loan offers which provide for this possibility authorize, most often, a postponement of one to twelve maximum deadlines and this, from a to two years of effective reimbursements. But beware, that doesn't mean you won't have to pay anything at all. In fact, the suspension of monthly payments does not apply to borrower insurance premiums, which must therefore continue to be paid each month.
Like the temporary lowering of your maturities, their postponement inevitably leads to an extension of the duration of your mortgage, and therefore additional interest. That said, in view of the particularly low rates in recent years, the impact remains limited.
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Loan insurance
It is to guard against financial glitches that banks require individuals to take out borrower insurance with their mortgage. As soon as you are in one of the cases provided for by your contract, it is your insurer who takes over the reimbursements. Except that this protection is limited. In view of its high cost, it most often confines itself to covering the risks of death, invalidity and incapacity. To protect yourself against the possible loss of your job, you must subscribe to an additional option. But beware: this guarantee generally only targets economic redundancy on permanent contracts, which excludes all other cases of breach of contract, partial unemployment, precarious employees and the self-employed.
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