There are many types of credit repurchases: consumer loan repurchases, bridge loan repurchases and home loan repurchases. The latter takes place when you have taken out several loans to buy different properties.
What is mortgage buy-back?
Buying back a home loan is a response to different situations. Before using a loan buyback, you must have already taken out a loan beforehand. This loan may have been used to buy a house, apartment or land. You must then pay it back to your creditor with an interest rate. This will make up your monthly payments. First of all, the credit repurchase can correspond to a grouping of real estate loans. You have taken out several loans from several creditors (banking institutions). The credit repurchase allows you, in this case, to repay a single creditor with lower monthly payments. Then, the credit repurchase allows you to restructure your debt. When you are on the threshold of over-indebtedness and no longer have the means to repay your creditors, you can call on another banking organisation to do it for you. Afterwards, you will repay the new bank with more flexible conditions. Afterwards, the credit buy-back can be used to buy back a single credit. This is the case when you have only taken out one mortgage, but want to review the repayment conditions. For example, you want to lengthen or shorten the repayment period and reduce the monthly payments. This is called renegotiating a loan. This takes place at your bank, while the credit repurchase in general can be done by another bank. In any case, the purpose of buying back credit is to improve your financial situation.
Buying back a home loan: for whom?
The repurchase of a mortgage loan is for anyone who wants to change their repayment conditions. But, before judging this solution useful or not to your situation, it is better to carry out a simulation of repurchase of credit. Then, always make comparisons to find the most advantageous offer. In any case, it all depends on your situation and your needs. If some people use the buy-back of real estate credit to extend the repayment period and reduce the monthly payments accordingly, others do it to reduce this period. This allows you to free yourself from a debt that may prevent you from starting a new project, for example. But most of the time, credit repurchase is used to reduce repayment pressure. Thus, this solution is of particular interest to people in a case of over-indebtedness or to senior citizens who want to anticipate retirement and thus the drop in purchasing power. Note, however, that buying back a mortgage is not accessible to everyone. Your application may be refused if your debt ratio is too high or if you are in conflict with your creditor.
How to obtain a home loan repurchase?
You must set up a file to make a request for a home loan buyback. You must provide your marital status, your income and expenses, your debt ratio and your real estate assets. These documents prove your solvency and your ability to repay. However, banks must be prepared for all eventualities. You must offer financial guarantees in case of non-repayment. The most common solution is to mortgage your property. You can also show proof of your financial and personal situation. You must prove that you are not over-indebted or registered with the Banque de France. Finally, a third person can act as guarantor and act as surety. This is valid whether it is for a credit restructuring or a real estate credit consolidation.
How to calculate the rate of credit repurchase?
You have to be careful, because the credit buyback may not be advantageous in certain situations. You should study the rates offered by the financial institution to calculate the total amount to be repaid. The rate can be fixed or floating. The principle is similar to that of a simple loan. The fixed rate, as the name suggests, does not change until the end of the repayment of your buyback and is fixed when the contract is signed.