When several people (cohabitants, friends, colleagues.) buy a property in joint ownership, they can also obtain a property credit in joint ownership. Can this type of financing be pooled?
Real estate credit in joint ownership: what is it?
A real estate credit in joint ownership is a loan to finance the acquisition of an immovable property. That is to say, a fixed-rate mortgage, variable or captive, contracted by several people (co-owners). This type of financing must be repaid by the co-borrowers. The amount of the installments is determined according to the effective investment of each co-owner (50-50, 60-40, 70-30). The conditions for obtaining a housing loan in joint ownership are the same as for a mortgage loan contracted by a married couple, a real estate company or a single person. Indivision housing credit is a collective credit, therefore, no banking transaction can be carried out without the agreement of all co-borrowers regardless of their shares.
Indivision credit: the specificities to know
If the property credit in joint ownership is the best alternative for the cohabitants wishing to become owners in all serenity, it is essential to know some specificities before launching. In an undivided acquisition, the distribution is recorded in the deed of ownership. Thus decision-making takes place unanimously. That is to say, in case of disagreement or separation, a reasonable solution can only be found with the agreement of all the co-owners. However, according to the civil code, the partition can always be caused by selling the real estate or by opting for a redemption of balance (redemption of share). For the group loan, the lenders include in most indivision loan agreements a solidarity clause between the co-borrowers. This means that the co-owners are jointly and financially responsible. Thus, in the event of litigation, the lender may legally demand the repayment of the remaining outstanding capital of outstanding loans to any of the co-borrowers.
Loan purchase in joint ownership: how is it going?
Like a conventional housing loan, the joint real estate loan can be the subject of a consolidation of real estate loans. However, as this type of financing is a collective debt, the pooling of credits in joint ownership requires the consent of all co-borrowers. The criteria for granting this loan pool remain the same as for a conventional loan buyback, the repayment capacity of each co-borrower is calculated according to its borrower profile (financial and professional situation, bank history, file) . For credit insurance, most credit institutions require mortgage insurance with a mortgage guarantee or bond.