Mortgages are governed by numerous laws that allow the control and protection of both borrowers and lenders. Why make real estate laws? What are the different laws that co-exist and what are their impacts on consumers? Whether they act in terms of insurance, loan or withdrawal period, many laws now regulate real estate. Focus on the Hamon law, on the laws governing mortgage insurance, but also on the Lagarde law!
Why legislate as part of the mortgage?
Many laws and measures regulate borrowers and lending institutions in real estate.
Their main purpose is the protection of the consumer, but also the respect of the commitments made by both parties. They sometimes give rights to one, sometimes duties to another.
They can also encourage investment, as in the case of tax exemption programs, or boost the game of the competition.
The different real estate laws
The Hamon law, insurance for his mortgage
Published in 2015, the Hamon law offers consumers the possibility of mobility from one insurance company to another. This law is open to contracts of automobile or housing type, but also to credit insurance. From now on an insured can cancel his contract beyond the first year of insurance.
In the context of borrower insurance for a mortgage, the majority of the contracts are underwritten directly with the lending bank. This habit is in the process of evolution, which encourages the banks to redouble their efforts during the negotiation.
Lagarde law, ensure small mortgages
The Lagarde law regulates loans of less than 75,000 euros. In the field of real estate, it relates to credit work or insurance borrowers. It encourages insurance delegations in the context of a mortgage loan. Moreover, it imposes on lenders transparency in the display of the real cost of credit and borrower insurance. The withdrawal period has been doubled from 7 to 14 days.
Many other laws exist in this vast area that is real estate, their purpose being systematical to protect the consumer, especially in advertising credits, withdrawal periods, reflection, conditions precedent, refusal of loan, loan repayment, etc.
The impact of consumer laws
Most real estate laws have a positive impact on the development of real estate loans. They make it possible to offer a broad choice to the borrower, in particular, to make play the competition.
They also allow him, during the life of the loan, to make changes and enjoy the benefits that result.
Banks must play the transparency card and display the true cost of credit without any gray areas.
The reflection period has been increased, the borrower can also enjoy a longer time before committing.