The interest rates currently very low are an opportunity for many households to review their loans down and take advantage of this new purchasing power. For this, two options: the renegotiation or the repurchase of mortgage.
How to request a renegotiation of your mortgage?
Beware: renegotiation is, as its name indicates, a negotiation. It consists of making an appointment with your banker to renegotiate your current credit, and to try to obtain more advantageous terms than those granted a few years earlier. A solid pitch and a lot of skill will be the keys to the success of this exchange. As a result, the lender will carefully review your loan file to see if he or she responds favorably to the request or not. The profile of the borrower here is crucial. Stability of the situation, seniority in the bank, increase or promotion in sight: everything will be good to show your good faith.
How to calculate an advantageous loan renegotiation?
To be advantageous, the renegotiation will modify one or more elements: the duration of the credit, the interest rate, the amount of the monthly payment or the schedule. In order for the transaction to be favorable to you, it will be estimated that a favorable difference will be at least 0.5% between the initial rate and the renegotiated rate. If your banker goes in your direction, then the procedure is simple. The latter will simply write an amendment to your existing contract. But note that fresh new records are then expected! Ask for an estimate in advance.
Buy your credit by another bank.
You can not renegotiate with your bank? No problem: call a new bank to buy back your credit. The home bank will then sell its loan receivable to your new bank that acquires your debt. With conditions (repayment period, application fees, insurance, etc.) and more favorable rates, this new loan will reimburse the remaining principal of the initial home loan in its entirety.
Or by your own bank
A credit redemption can however be considered with your bank, around different terms. When renegotiation lowers the interest rate and the overall cost, the purchase of credit can reduce your monthly payments, while the total cost of credit increases. Ideal to help you blow a little financially every month. You can also decide to group your current loans in a single monthly payment, and at more favorable prices. An interesting solution if you have several loans at the same time, sometimes in different banks, that you have trouble repaying.
The purchase of credit more expensive than renegotiation, but ideal to lower your monthly payments
In the end more expensive than the renegotiation, the repurchase of credit can generate several ancillary expenses such as: the expenses related to the repurchase of credit (expenses of file or constitution of guarantee), the expenses related to the prepayment (IRA) whose amount amounts to 3% of the amount remaining due, and costs related to the cost of the release of the mortgage. But it also allows to lower the bill every month. And it can also be an opportunity to change air or rather bank.
To prepare for your renegotiation: play the competition. Estimate your coup of the outstanding capital with another bank, and show your banker the new conditions proposed by this bank. As part of a credit redemption, make a free simulation and no obligation with Headless horseman and reduce your monthly payments up to 60%!