Domiciliation of wages, loan insurance, or even taking out internal home insurance: signing a mortgage is often accompanied by many questions from the lending bank. If you don’t accept it… you are often caught.
This is a situation that you may be familiar with if you have recently taken out a mortgage loan from a banking institution: during your first appointment with the adviser, many things are discussed, except the loan in question. When the discussion progresses, more or less formally, the bank will explain that you have to agree to certain actions.
Domiciliation of income, loan insurance, shares or even home insurance… As many products as the lending institution offers to the borrower. And very often, the latter has no choice but to accept.
In France, there is no right to credit as there is the right to an account
When you take out a mortgage, there is an unbalanced balance of power between the engine that has all the powers against an applicant for the loan that has a very important project, considers Aurlien Soustre, member of the Advisory Committee of the Financial Sector (CCSF). It must be remembered that in France there is no credit right like the right to an account. Even if you are solvent and meet a certain number of criteria, there is no no establishment that is obliged to lend us money. This means that the borrower is in a position of weakness and is ready to accept anything in order to borrow money.
A business negotiation
The bank can refuse a home loan without justifying its refusal, abounds Mal Bernier, spokesperson of the broker Meilleurtaux. Paradoxically, the bank cannot ask for the loan, nor the domiciliation of the income, nor the subscription of other products, legally speaking. So you are under no obligation if you take out a loan.
As for direct debiting, after an attempt at supervision in 2018, the Pacte law that came into force at the end of May 2019 reset the counters: from now on, direct bank debiting must be integrates commercial negotiation. Most of the time, this point is set informally, during discussions with your banker. Your contract may, however, provide for the domiciliation of the accounts, in exchange for an individualized advantage, notes Olivier Gayraud, lawyer of the association Consumption Housing Living Environment (CLCV).
The problem is that the rates are not public
Therefore, the bank can promise you advantages, such as a preferential rate, if you settle your accounts with them. The problem is that the rates are not public, points out Aurlien Soustre. So the bank can also offer delusional conditions and then pretend to lower the rate if you subscribe to the products it offers. Real estate credit is a product with little transparency.
The same goes for loan insurance and home insurance. According to conomie.gouv, the bank can offer a contract with a partner insurer, but the loan remains. free to contact the insurer of their choice.
A bench Of course, you can not force you to take out motor insurance, confirms Olivier Gayraud. You have the right to refuse and choose another. But very often, the account manager plays on the sensitive string of mutual trust and the desire to build a global relationship to encourage them to accept these products. If you think a denial could prevent you from getting credit, take it, advises Olivier Gayraud again. You will have change all the time.
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The borrower is not a prisoner
Why then this desire of the banks to offer all this? The answer is mostly financial: if the mortgage still brings money to the bank, the additional subscriptions allow you to generate additional income. The domiciliation of the income responds to a double logic, also details Aurlien Soustre. The first is commercial: an active customer, who has the means of payment and who does banking transactions, bring money to the bank. The second thing is that with direct debit, we also have income insurancewhile they are in another establishment can be rat.
Having a global view of your resources also allows the bank to offer other financial products, especially to invest your money, or on the contrary to find solutions with you in case of difficulties, such as a period of unemployment for example .
When the real estate loan is signed, the balance of power is reversed: the borrower may quickly decide to look elsewhere. In fact, today we can say yes to everything without being impacted for a long time, recalls Mal Bernier. Whether it’s home insurance or beneficiary insurance, you can leave pretty quickly. Indeed, home insurance can be changed every year, while borrower insurance can, since the entry into force of the Lemoine law on June 1, 2022, be terminated at any time.
Real estate credit: what should we expect for the return?
If the borrower sometimes has the impression that the bank takes advantage of his weakness to force him to subscribe to the products, everything can not be thrown away. It is not bad to have the details of your bank’s home insurance guarantees, explains Olivier Gayraud, for example. Banks have been doing insurance for a very long time, and sometimes they offer very good guarantees. The borrower must not refuse all the right with the pretext that it is the bank that offers it. According to him, it is a very bad calculation to look only at the cost. Sometimes it’s better to pay a little more for a contract that covers you better. Especially if the signing of this contract allows you to obtain the expected mortgage.