The lender's lien is a guarantee taken by a financial institution in connection with a home loan. Its operation is close to that of the mortgage. In what case does it apply, what are its advantages?
Similarities and differences with the mortgage
Both the PPD and the mortgage serve as collateral for the creditor. Which means that in the event of non-payment of monthly installments of credit, the property is seized and sold by the bank or the financial institution concerned.
They both require the preparation of a notarial deed, the costs of which are borne by the borrower. However, unlike a mortgage that takes effect on the date of its registration, the lien of the lender of money recognizes the date of the sale. This, even if it is registered with the Mortgage Conservation, within 2 months after the sale.
Result? The lender's privilege is retroactive to the day the sale is signed. Thus, the preferred creditor will always prevail over the mortgagee, the same debtor. Hence his name of "privilege". Generally, the PPD will therefore be preferred by the creditors.
The only restriction of the PPD, it guarantees only the sums necessary for the acquisition of an existing land or dwelling, thus only old properties. It does not cover the sums needed for the construction of a single-family house or those of a sale on plan.
The cost of the PPD
The PPD is less expensive than the mortgage because he is not subject to the land tax. If the situation allows, the borrower will prefer it to the mortgage. In addition, the PPD automatically turns off and no charge, 2 years after the end of the loan.
However, if you repay your loan before it ends, you will have to pay a release fee. It is a legal act by which the creditor attests that the debtor has fully repaid his loan.
You can also sell your property before the maturity of your credit. When the owner changes, the creditor retains the opportunity to sell the property in case of unpaid. It is simply a question of proving that it is no longer about you, hence the need for a release.
Before using a PPD, it is strongly recommended to calculate its total cost including notary fees and release even if you do not intend to use it.