Debt consolidation loan: What It Is, How It Works and Why Mortgage Loan

The lack of liquidity, above all, by virtue of substantial investments, has favored the request for loans both to private agencies as financial institutions and to bodies, while still private, such as banks.
There are several forms of financing, to which you can refer, among the most requested there is certainly the mortgage, often and willingly required for the purchase of the first house. The mortgage is a contract to real obligations, usually banking, through which you can, as a natural person or legal entity, borrow money for the purpose of acquiring goods or services, with the obligation to return the credit monthly within a number of years, including interests, legally calculated based on the historical moment.

A classic example of a mortgage is the real estate mortgage, in this case the request for the provision of money is aimed at buying a property, the peculiarity of this loan is the double contract signed by the notary, purchase between buyer and seller and mortgage between bank or financial institution and natural or legal person. A legal case related to the purchase of real estate, within the real estate mortgage is the assumption of the mortgage.

What is the acceptance of the mortgage

The accollo is a legal institution that finds its discplina in the art. 1273 of the Italian Civil Code, this is a transfer of credit to a specific person, it differs from the ex-proxcision, since in the latter the agreement is stipulated in the financial year or the bank that has sold the loan and the person who takes over in debt. The takeover, is specifically the assumption of the loan, is the contract between the subject originally debtor, technically called “accollato” and the subject who takes over the debt, technically defined as “collateral”, the third assumes the obligation to pay the installments for the acquisition of the real estate and to fulfill any additional services underwritten in the original loan agreement. The takeover can take different forms, we speak of an external takeover, where the original debtor requests to be part of the third party of the debt subrogation agreement, also we speak of internal takeover, in which case the original debtor remains excluded from the agreement.

How does it work

If you want to buy a property from a seller who still has to extinguish the mortgage, you can ask the seller to free the property from the mortgage or take it yourself or together with the seller the mortgage, by signing a private contract with the seller. In relation to the second option it is possible to distinguish between two types of take-over:

  • liberating, the buyer takes over the mortgage under the same conditions as the original collateral, by paying the difference in the value of the asset to the seller / accollato, which in this way is released from the debt;
  • cumulative, in this case, the buyer as the third party and the original debtor are both jointly and severally liable towards the lender.

For the purposes of assignment of the loan and the ownership of the immovable property it is, inter alia, necessary that you turn to a notary to sign a notarial deed called “deed” through which the notary authenticates and legitimates the transfer of ownership over the property of the ‘estate.

Because the mortgage is accepted

The acceptance of the mortgage brings advantages both for the accollato and for the borrower as well as for the lender. If you are going to buy a good from a seller who has not yet repaid the mortgage, you can decide to take the mortgage, this will save time and costs such as all incidental expenses related to the opening of the mortgage itself arising from the appraisals, from the deeds of the notary etc… or of closure or termination of the loan.

Particularly advantageous is the purchase of a property from a company, in which case I would be obliged to pay only 80% of the debt subscribed. If you have a property and you have not yet repaid the mortgage, selling it to a natural or legal person will allow you to free yourself from debt (“liberating”) or share the same with another person (“cumulative accolade”). If you are a lending institution like a financial institution or a bank, you can take it as a further guarantee of credit fulfillment, the third party assuming the credit obligation, guarantees the fulfillment of the pecuniary obligation, rest, it does not matter who acquires the credit, therefore, difficult the entity that provides the credit will not grant its consent to the change of the debtor.