Beware Of Pseudo-Insurance!

The system of real estate insurance and insurance entwined into the single coalition long ago. This frequently does not pay into people hands who are interested to use mortgage.

Often insurance companies have a certain arrangement with banks which in case of agreement conclusion impose not fair policy of insurance sending the borrower to insurance companies pleasing to them with the overestimated rates and commissions, getting additional profits from it.

The borrower has to agree with conditions of creditor bank as whatever bank he wouldn’t address he will receive just the same problem.

For this reason in the period of state crisis aggravation for protection of the population which took a mortgage loan the insurance against jumps in prices in real estate market certain fixed limits at the legislative level were established. That is there is upper and lower limit of insurance sums. For example, the insurance less than for 10% of credit cost is forbidden. It is connected with its inexpediency as less than 10% risks are obliged to be undertaken by the creditors.

But at the same time the regulation about a debt forgiveness of the borrower has been seriously changed. Before the bank undertook the difference between mortgage property and amount of debt only if it was impossible to sell it at the adequate cost at the biddings. Therefore, borrowers initiated the intended spoil of property in order nobody wanted to buy real estate, and the borrower had not to pay a remaining balance for the credit. Now debt forgiveness is possible only for borrowers who show responsibility and undertook the insurance.

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