To benefit from more interesting rates, more flexibility, to embark on a new project or simply by preference, one will be able to want to pay off one’s real estate loan to contract a new one. Only it is not so simple, and not free either, to get rid of this weight to go to new horizons.
Indeed, early repayment benefits (IRA) will certainly be your responsibility. Their amount is calculated according to the agreement reached at the time of signature. The total amount and the amount already refunded will be used to calculate the total allowances. If you had opted for the mortgage as collateral, you will have to apply for an operation called a “release”. A “release” is the legal act that will remove the guarantee on mortgaged real estate. This operation also has a cost that will have to be taken into account. Finally, once the previous credit cleared, it will find a new bank that will agree to make a loan with a favorable rate. In addition, it will be necessary to count the cost of setting up a new guarantee (like a mortgage for example) as well as the expenses of file relative to this new loan.
Transferring a current mortgage from one bank to another is not feasible unless by a miracle an error in the drafting of your contract authorizes you to do so. Most often, when signing a mortgage, you agree to a domiciliation income clause that requires you to receive your income from this bank in order to repay your credit. It is very difficult to disengage from this type of clause. At best, only the amount required for reimbursement can be continued if the institution accepts this type of measure. In this case, two solutions are available to you, pay your credit to contract another as explained above or call for a loan buyback like you, we explain below.
To avoid the domiciliation of income and offer more opportunities, grouping loans seems to be the ideal solution for those wishing to change the terms of their mortgage. This operation will renegotiate rates in some cases, grouping its mortgage with other loans and debts to have only one monthly payment to settle and spread the repayment period over a longer period. However, it will necessarily face some costs mentioned above such as the prepayment compensation for example. What is interesting is that it can be included as a debt in its repayment and therefore not have to pay in one go. The repurchase of credit thus seems to be the ideal solution, in any case more interesting than the balance of its old loan, to readjust its repayments according to its possibilities.
With the so-called “transfer clause”, it is possible to buy a new property without taking out a new loan. A concrete example to better understand:
I want to sell my house to buy a new apartment but I have not finished paying for my house. Yet, my credit, written several years ago, offers advantages that I would like to retain rather than taking out a new loan with lower interest rates.
Thanks to the transfer clause, I can sell my house using the money from the sale to pay for my new apartment and I keep my credit in repayment. I just ask that it be transferred to the new property. In this way, I was able to resell and buy without inconvenience. The new apartment will now serve as collateral since the credit has been transferred over.
This operation offers several advantages: no prepayment tax, insurance at the initial price (that is to say that has been contracted younger and therefore cheaper), no costs related to the contraction of a new credit . However, this clause is rarely put forward by banking institutions that would prefer a new loan. This practice to the advantage of buyers and often difficult to obtain, and it will fight hard with his bank to agree to grant you the transfer clause, even if it
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