Early repayment to close a mortgage life loan
The early repayment of the mortgage life loan is fully authorized by the terms of operation of this type of credit. These are indicated in the contract entered by the borrower and the lender before a notary.
When you make a full prepayment, you can close your mortgage life loan. Be careful, however, because the signed contract can set blocking criteria, such as compensation to be paid to the lender. These are fixed as follows:
- Before the fifth year , the prepayment indemnity represents four months of interest for a paid-up capital at a time and five monthly installments for a paid-up capital periodically;
- Between the fifth and the ninth year , the allowance represents two months of interest for a paid-up capital at one time and three monthly installments for a paid-up capital periodically;
- From the tenth year , the indemnity is one month of interest for a paid-up capital at one time and two monthly installments for a paid-up capital periodically.
Closing a mortgage life loan by selling the mortgaged property
When you want to close a mortgage life loan, it is also possible to sell the mortgaged property. This type of transaction effectively terminates the contract with the lender before a notary.
It should be noted that the closing of the contract is also effective when the owner of the property sells the usufruct or the bare ownership.
In this case, the lender is entitled to challenge the sale price or the estimate proposed during the proposed sale, and to ask for an expertise to verify that the case is good. In the case where the estimate is higher than the price previously set by the owner, the lender is entitled to seize the property or claim the amount indicated by his expertise.
The death of the borrower can close the mortgage life loan
Last possibility to close the mortgage life loan, the death of the borrower occurring before the end of the total repayment of funds. In this case, the amount of principal and interest can not exceed the value of the mortgaged property estimated at the end of the contract. When the single borrower or the last borrower dies in case of multiplicity, there are two choices for the heirs:
- Keep the property mortgaged and repay the loaned funds;
- Let the bank sell the property to pay back the funds.