- Recording in the land register
A special feature of residential property loans is that an encumbrance on the financed property (land, house, condominium unit) is recorded in the land register in the form of a mortgage.
The mortgage is a lien on the property, and it is recorded in the land register. It serves as the lender’s collateral for its financing(s). Once the loan is repaid in full, you can arrange to have the mortgage deleted.
- Other possible forms of collateral
- Other financing recipients
They are equally liable for all liabilities arising out of the financing. Co-borrowers normally draw their own benefit from the disbursed financing resources and are equally liable for repayment of the financing.
Guarantors are liable to the full extent of their assets, and depending on the way the guaranty agreement is structured, they can be made to satisfy claims under the financing when it becomes due.
- Pledging of, e.g.
Salary claims, tangible assets such as savings passbooks, securities, gold
- Assignment of cooperative shares
The claims against a residential cooperative (= “paid-in cooperative shares”) are pledged. The collateral can be granted in hidden or open form.
- Pledging or assignment of insurance policies
In the case of a pledge, the insurance company disburses the insurance amount only to the lien holder when the insured event occurs. In the case of assignment (Vinkulierung), the insurance company undertakes to make payments in the event of a claim only with the consent of the provider of the financing.
The following types of insurance are commonly pledged or assigned as collateral for financing:
- Life and annuity insurance, casualty insurance
Serve to cover the financing when life and/or annuity insurance comes due or when the policyholder experiences an accident
- Residual debt insurance
Serves to cover the financing when the borrower dies, as well as, depending on how the policy is structured, in the event of disability, unemployment, etc.
- Fire insurance
Is mandatory when pledging developed property.
We accept foreign collateral after reviewing it.