Motor insurance and SCPI: how to change or do without!

Finally! Long awaited, the termination at any time of the mutual insurance, contracted as part of a mortgage, comes into force. Excellent news for millions of French people who could save money. Although this insurance is mandatory for a real estate purchase, there is an exceptional case that allows the purchase of real estate without loan insurance. We explain everything to you in this article.

Termination at any time is effective

This is great news that concerns millions of French people. Since June 1, 2002, loan insurance, which must be insured as part of the credit financing of a property purchase (main residence, rental investment), can be terminated at any time by the loans More specifically, the June 1st date applies to credits finalized after this date. If you have a loan in progress before this deadline, it is from September 1st that you will have the possibility to terminate your borrower’s insurance.to change whenever you want.

Why change your credit insurance? Because too often, borrowers take expensive insurance, offered by the bank, and they could take advantage of a better offer. in game, thousands of euros in savings over the life of the loan. With the drastic drop in mortgage rates observed over the decade 2010-2020, the cost of insurance weighs heavily on household budgets. Being able to give it up at any time (instead of once a year, on the date of the anniversary of the contract) to opt for a more competitive offer therefore represents a major step forward.

This reform, resulting from the Lemoine law voted in February 2022, is accompanied by other measures. The medical questionnaire, used to determine the loan insurance rate based on the state of health of the borrower, will no longer be required for mortgages of less than €200,000, as long as the loan reaches maturity before the 60 years of the last. Finally, the period of the right to be forgotten, which concerns people who have suffered from cancer in particular, is halved, going from 10 to 5 years.

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Borrower’s insurance, mandatory most often… but not always!

If loan insurance is mandatory for the purchase of a main residence or a property to be rented, there is a particular case in which it can be optional. This particular case is the purchase of SCPI shares on credit, an asset management technique particularly relevant for savers who want to take advantage of their savings capacity. to acquire a substantial and profitable real estate portfolio.

In most of the offers referred by Meilleurtaux Placement to finance the purchase of SCPI shares on credit, borrower insurance is only optional. In other words, it is possible to save several thousand euros to do without this insurance, compared to a physical real estate acquisition.

For example, the CFCAL – Crédit Foncier et Communal d’Alsace et de Lorraine – offers an investment solution in creditable SCPIs with optional mutual insurance that allows the financing of a large number of creditable SCPIs, especially foreign SCPIs. Among other features of this offer:

  • No direct debit required
  • No contribution requested
  • Unrestricted age conditions: possibility of borrowing up to the age of 85 at the end of the loan
  • Financing from 10 to 25 years
  • Wide selection of SCPIs: in particular several SCPIs invested mainly outside France. Investing in foreign SCPIs allows you to diversify your investments and benefit from lighter taxation
  • No application fees or other additional costs

To access this offer, you must have physical real estate (RP, RS, RL, managed LMNP, outside SCPI, parking, barn, etc.) in mainland France (except Corsica and Dom Tom). This offer is not accessible to non-residents, self-employed and business leaders, but open to liberal professions.

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Do you want insurance? Meilleurtaux Placement takes care of finding you the best offer

Among the offers chosen by Meilleurtaux Placement, only one requires the signature of the borrower’s insurance. As part of the offer of our partner Orange Bank, loan insurance is mandatory… but by delegation! It is therefore up to you to choose the terms of your insurance, rather than having to choose the loan bank. A welcome flexibility, which is accompanied by other specific advantages of this offer:

  • No direct debit required
  • No contribution requested
  • Financing possible from 5 to 25 years, in amortizable credit (€50,000 minimum, not maximum)
  • Possibility to invest in several SCPI with the same loan
  • Home loan guarantee fees, about 1.7% of the loan, financed
  • Application fees (without funding): €900

In addition, many SCPIs that appear in our 2022 list of the best SCPIs can be funded, including:

  • ActivImmo
  • PF Grand Paris
  • Regions of Vendome
  • Prime
  • Property savings
  • Immortal

This offer is intended for sole proprietors of net real estate assets (deducted balance credit where applicable) in mainland France. Common property shares, garages, bare land, SCPI, property in dismemberment are excluded.

This offer is not accessible to non-residents and legal entities.

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Use leverage to build real estate

With a fixed monthly savings capacity (50, 100, 500, 1000 euros), an investor can take advantage of the credit leverage to make a real estate investment in SCPI. Then use their savings to repay the loan. And you won’t have any management or rent collection worries to deal with, as SCPI’s management company takes care of everything!

With a savings capacity of 300 euros per month, it is possible to obtain, from the first year, thanks to the credit, an invested capital of around 100,000 euros. The credit allows an individual to make an investment in SCPI financed primarily, initially, by the bank. This is credit leverage, the ability to immediately benefit from a large investment that will produce attractive returns.

These returns will cover the cost of credit (interest), but also partially repay the monthly payment. The purchase is therefore partly financed by the rents paid by the SCPI!

Let’s say you borrowed 100,000 euros in 15 years, to invest in an SCPI that yields 4.5% (average distribution rate of SCPI in 2021). You will receive from the first years 4,500 euros back.

To repay the credit, you will have a monthly payment to pay, of about 600 euros per month (interest included) in our example. And since you have an income of about 375 euros every month, you only have 225 euros left per month to invest in this project. After 15 years, the credit is repaid and you are therefore the owner of an asset of 100,000 euros, and it can be 110,000 or 120,000 euros if the price of the shares has been revalued.

Discover our range of SCPI on credit

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Non-contractual communication of an advertising nature.

SCPI performance units are long-term investment vehicles (minimum 10 years) and should be purchased with a view to diversifying your assets.

Past performance is not indicative of future performance and is not constant over time.

Like any investment, real estate has risks:

– The fall in the value of the investment. The capital invested in an SCPI is not guaranteed. The value of the share of an SCPI evolves over time, in close relation with the state of the real estate situation of the business. This situation follows successive cycles, with ascending and descending phases.

– The decrease in rental income. In a less favorable economic context, the fall in rental income paid to partners is due to the fall in the financial occupancy rate and/or the fall in the overall amount of rent paid by tenants. However, this decrease may be mitigated by the effect of the pooling of risks thanks to the real estate and rental diversification of SCPI’s portfolio.

– Liquidity. Since the SCPI is not a listed product, it has less liquidity compared to financial assets. The terms of sale (topics, price) may therefore vary according to the evolution of the commercial real estate market and the SCPI share market.

Non-contractual information. The hypotheses presented in this article cannot be considered as an offer of credit. Any request can certainly not affect the decision taken by the loan establishment to grant or not the requested credit. A loan commits you and must be repaid. Check your repayment capacity before committing. No payment of any nature may be required of an individual before obtaining one or more cash loans.

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