Is it still possible to insure your mortgage after being infected with COVID?

According to insurers, the virus of COVID -19 is considered to be a risk of worsened health. So how are the real estate projects and the legitimacy of the loans if you have been infected with this deadly virus? To answer this thorny question, here are Crédixia’s answers.

Est-il toujours possible d’assurer son crédit immobilier après avoir été contaminé par le COVID ?

Because of problems linked to the virus COVID, the bankers become more and more picky on obtaining of a case of real estate credit. Indeed, insurance of a real estate loan must first depend on the state of health of the borrower. In addition, the hospitalization time relating to the COVID infection makes the acceptance of a borrower insurance contract even more difficult.

Severity of symptoms and level of infection condition greatly the response of insurers. If you have been contaminated by this virus, it is possible to find a compliant response to insurance of ready depending on the severity of the infection.

In the case of borrower insurance, the COVID virus is similar to all other diseases. There is no particular medical selection to contest or adjourn the files, for those who have been affected by this virus.

Like an average borrower, the applicant will have to fill a form of health, and the insurer will decide on the coverage risk, depending on the answers:

  1. If hospitalization with suspension of work greater than 21 days: The borrower will be required to complete a detailed health form and submit to a request for additional information. In most cases, hospitalization is mainly caused by respiratory problems. Thus, the possible risks implied by these after-effects will generate a postponement of demand.
  2. If hospitalization with suspension of work less than 21 days: The insurer will have to study the file more precisely, but it will certainly be able to find a solution for this type of case. However, acceptance of the request will depend on the health history of the applicant.
  3. If absence of hospitalization with suspension of work less than 21 days: The insurer will carry out a more detailed study of the file, but will certainly find a solution to respond positively to the request.

As for the credit ? In the situation of a borrower who has been contaminated by the COVID virus, obtaining of credit is determined over there duration of sick leave. If the latter is greater than 3 months, the borrower will be subject to a loss of income, which will impact its borrowing capacity, because the pay slips for the last 3 months will indicate this drop. Indeed, the bank will rely on the last 3 pay slips to control the ability of refund. These pay slips will state the compensation paid by the employer, and the bank will not take into account the compensation paid by social security.

Thus, the bank will not be able to not grant credit if the debt ratio exceeds the authorized 35%. People subject to exposure to “long covid” are also ineligible, because their sick leave is estimated to be more than approximately 6 months. However, there is no rush to constitute a case of funding for the realization of a project once the income will have returned to normal. A real estate loan after a sick leave is difficult, hence the need to seek professional help.