Published on : 11 May 20203 min reading time
Buying back a home loan is an interesting and efficient solution for all borrowers. But to make a success of this operation you must take the time to understand it well.
Buying back a loan can be the best solution in some cases but you must still be very vigilant especially with regard to the different interest rates. Certain traps are to be avoided so as not to find yourself in an even more difficult situation.
Principle of the repurchase of real estate credit
The principle of a repurchase of real estate credit is above all to repurchase a credit that you have already contracted so that you can benefit from the advantages of this operation in particular: lower interest rate, reduction of your overall monthly payment or the duration of your repayment.
Before making your request to buy back debts, whether from a credit company or a banking institution, you must be very careful because the operation remains commercial.
You can then make a simulation of repurchase of real estate credit online before making your request to better anticipate your choice.
Costs of repurchase of housing loan
The repurchase of real estate loan is an operation which certainly requires expenses for example expenses of files or other indemnities. You must also take into account the costs of early repayment.
Sometimes, the costs are rather important and this can push you to reconsider your decision.
Current real estate rate versus current credit rate
You must also keep track of your interest rate. Knowing whether the interest rate is fixed or variable is very important to be able to make a decision and make an advantageous transaction.
Regardless of your financial situation, you must also calculate the total cost of your loan consolidation.
Changes in the monthly repayment payments and the term of the loan :
If you find yourself with too much debt and little left to live on, you will obviously be tempted to apply for a refinancing in order to get out of it.
You will need to contact a professional to set up a home loan restructuring in order to lower your monthly charges.
This operation can help you to improve your current financial situation but you must be careful not to extend the repayment period too much so as not to pay in the end.
Conditions of a winning home loan repurchase
The operation of repurchase of credit is much more advantageous if the interest rates have fallen significantly during the first years of repayment.
When you make a debt buyback, find out about the interest rate before confirming a proposal.