In the current state of loan rates, they are more and more interesting so that many former borrowers wish to renegotiate their mortgage in order to benefit from it. This operation is called the repurchase of mortgage loan. Let's see how it works.
What does the mortgage repurchase consist of?
The sudden change in financial situation, an accident in life, divorce can be the causes pushing borrowers to apply for home loan redemption. But this decision can also come from the desire to jump on a great opportunity, such as buying the beautiful house next door and taking advantage of the low interest rate at the time. The real estate loan repurchase then consists in redeeming the outstanding mortgages by means of a new loan made either from one's bank or from another establishment.
What is the point of buying back your mortgage?
The advantage of such an operation is to be able to take advantage of the best rate. This implies for the households which benefit from it a restructuring of their finance. Their monthly payments can be reduced. In reality, the bank to which we took out the old loan does not offer to buy back the mortgage. It is therefore up to the borrower to turn to the competition. Renegotiating your mortgage is also only profitable when the difference between the old and the new rate is significant (1 point according to experts).
Who can buy a mortgage? At what moment ?
Not everyone can redeem their credits. Indeed, this offer is only intended for people who own real estate who have already taken out a real estate loan. This condition is linked to the very pledge of the loan: the mortgage . The owner can mortgage his property in order to solidify his request. In order to take advantage of the new credit, it is wiser to renegotiate your mortgage 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 perform a mixed buyback including other consumer loans. Before deciding to take the plunge, it is wise to do a mortgage repurchase simulation and take into account the costs incurred by the new contract.