In the current state of borrowing rates, they are more and more interesting so that many former borrowers want to renegotiate their mortgage to benefit. This operation is called the home loan buyout. Let’s see how it works.
What is the repurchase of mortgage loan?
The sudden change in the financial situation, an accident of life, divorce may be the causes pushing borrowers to apply for home loan repurchase. But this decision can also come from the desire to jump on a great opportunity, like buying the beautiful house next door and enjoy the low rate of the moment. The repurchase of real estate credit then consists in repurchasing the outstanding property by means of a new loan carried out either with his bank or with another establishment.
What is the point of buying back your mortgage?
The advantage of such an operation is to enjoy the best rate. This implies to households who benefit from a restructuring of their finances. Their monthly payments can be reduced. In reality, the bank to which we subscribed the old credit does not offer to buy the mortgage. It is therefore up to the borrower to turn to the competition. Renegotiating real estate credit is also profitable only when the gap between the old and new rates is high (1 point according to the experts).
Who can redeem home loans? When?
Not everyone can redeem their credits. Indeed, this offer is only for people who own property that has already taken out a mortgage. This condition is linked to the very pledge of the loan: the mortgage. The owner can mortgage his property to solidify his request. In order to take advantage of the new loan, it is wiser to renegotiate your home loan as soon as possible, when the interest included in each monthly payment is still high. This period often corresponds to the first year of the contract, or the first third of his life.
Banks can offer to restructure the old mortgage , but can also make a joint buyback including other consumer loans. Before deciding to take the step, it is wise to make a simulation of repurchase of mortgage and to take into account the expenses caused by the new contract.