The repurchase of credit with mortgage is a banking solution only reserved for borrowers who have real estate. It consists of grouping together several loans in order to facilitate their management, reduce the amount of monthly payments or take advantage of a lower interest rate. How does the repurchase of mortgage credit work? What are the issues ? Explanations.
A repurchase of mortgage credit is a banking operation which consists in having several loans repurchased by a credit institution and in guaranteeing this repurchase by a mortgage on a property. Thus, only borrowers with real estate will be able to access a mortgage loan buyout. It can be a first or second mortgage, i.e. there are several other loans benefiting from a mortgage on the same property. The recourse to the repurchase of mortgage credit has several advantages, but also disadvantages. Therefore, it is important to know all the issues of this type of financing before you start.
The possibility of putting a property on mortgage is a real asset for a borrower. Indeed, thanks to this mortgage, he will be able to access more attractive buyout offers. This is a guarantee that is likely to reassure financial institutions. This is why they will be more inclined to make advantageous offers to their customers. If you are tempted by this solution, you should know that you will be entitled to preferential rates, insofar as the rate reflects the risk taken by the lender. On the other hand, bankers will tend to be more flexible about the criteria for accepting your case with real estate as collateral. You will even have the option of requesting capital to finance a project if you wish.
If the repurchase of credit with a mortgage as a guarantee opens up many opportunities, it should be noted that its implementation is somewhat difficult. First, the repurchasing bank will have to assess the mortgage portion of the loan. This is the maximum amount that can be granted to you depending on the value of your property placed as collateral. In this case, it is important to properly assess the value of the property, which is not an easy task in real estate matters. On the other hand, the implementation of a mortgage guarantee implies the passage in front of the notary in order to validate the mortgage. This will lead to additional costs in addition to your real estate project, not to mention that the processing of the file will take longer.
As with any financing, setting up a mortgage loan buyback begins with a feasibility study carried out by the buying bank. It will thus study the amount of credits to be redeemed as well as that of the new project to be included if there are any. On the other hand, it will also focus on the borrowing capacity of the applicant. It is at this stage that he will take into consideration the possibility of guaranteeing the redemption by a mortgage. Moreover, the organization will refer to the value of this property to determine the feasibility of financing.
After studying the file, the bank will make a buyout offer to the applicant, who will consult the important conditions such as the APR, the fees and the total cost of the financing. However, it is advisable to make several requests for offers in order to have material to compare. Thanks to a credit repurchase comparator, it will be easier for you to search for interesting proposals.
