What is free real estate credit?
A free (or conventional) mortgage is a Hester Prynnement solution that is issued to you by a bank or credit organization without any regulatory constraints. The offers of free credit therefore depend only on the institutions that offer them, which set their own conditions (eligibility, interest rate, mix of the rate, modulation of maturities …).
Free mortgages oppose regulated credits . The latter are granted by institutions that have entered into an agreement with the State. As their name indicates, they are therefore regulated by the state and are subject to fixed rules.
But all the same obligations
Each bank or credit institution can offer free mortgages under conditions it has set itself. However, institutions must still meet certain obligations . When an offer of free credit is made to you, it must necessarily mention:
- The nature of the loan, its mortgage rate (fixed rate, revisable rate …) and its purpose (purchase, construction, works …);
- The duration of the loan;
- The total cost of the loan;
- The annual percentage rate of charge, or APR
- The number of monthly payments and their amount;
- Guarantees requested: bank guarantee, mortgage, domiciliation, loan insurance …
Another obligation of institutions is to grant loans whose interest rate does not exceed the usury rate , ie the maximum loan rate that lenders are allowed to practice.
Banks and credit institutions are also required to submit a detailed fact sheet to clients, to study their creditworthiness and their ability to borrow and to warn them of the risks involved in taking out a loan.
Types of free mortgage
There are different types of free home loans:
- The depreciable loan : it is the most widespread. With this loan, the repayment of the amount borrowed and interest is spread over time. The amount of monthly payments and their date of payment are fixed in advance over a predefined period;
- The loan in fine : with this loan, you only repay the interest during the credit period, then you repay the borrowed capital in one time at maturity;
- Bridging loan : this short-term loan (1-2 years) allows homeowners to buy another one before selling the first one.
Why choose a free real estate loan?
Free mortgage offers advantages over regulated credit, starting with generally more competitive interest rates . Indeed, there are often higher interest rates for regulated credits than for free credits.
Another advantage of the free real estate loan: its flexibility. The free credit imposes less constraints on its subscribers: it is for example possible to buy one for the purchase of a second home, it is possible to adjust its monthly payments etc. In summary, free credit adapts to your needs.
Find the best free real estate loan
Like any home loan, a free loan commits you over time. Because this is an important commitment, it is legitimate to look for a cheap home loan, which offers you the best conditions.
To do this, the ideal is to use a comparator mortgage. Thanks to the online credit simulation, you fill in simple information about your real estate purchase project and your situation and you can access quotations in a few minutes. You just have to compare the offers to find the most advantageous free credit for you and to make your loan application!