Do you sometimes feel overwhelmed by the monthly payments and deadlines of your current mortgage? In general, extending the duration of a loan is a solution to reduce the amount of monthly payments in order to benefit from a more comfortable rest of life or have the possibility of coping with unforeseen expenses. But is it possible with a mortgage? Answers.
When concluding a mortgage loan contract, a repayment period is established by the bank on the basis of the borrower's debt ratio and the amount requested by the latter. Generally, if it is a large sum of money, the repayment term will be relatively long. On the other hand, if the borrower has a high repayment capacity, the bank may grant him a short-term loan between 10 and 15 years. The duration of a mortgage is fixed and must be respected by the borrower.
However, it happens that the amount of the monthly payments has become too high due to the appearance of new charges, for example. This means that you are no longer able to meet your unforeseen expenses. When the financial situation becomes unstable, it is therefore essential to find a solution. Extending the duration of your credit will inevitably come to your mind and this is logical since a longer credit implies a reduced monthly payment. You will then have to renegotiate the loan with your bank and if it grants your request, the credit will be recalculated as a whole.
Extending the duration of your credit will involve a renegotiation with the bank that granted it to you. However, this request is mainly made for the negotiation of the interest rate. It is rarer for a borrower to take this step to extend the repayment period of his loan. However, this is not impossible since credit organizations are well aware that the repayment capacity of their customers can change. If the extension of the contract is the solution to avoid over-indebtedness, the banks prefer to accede to this request.
To set up the renegotiation of the contract, an amendment will be signed by both parties. The new conditions will therefore take effect the following month. Note that if the risks are considered by the bank to be greater, it will be able to apply a less advantageous rate from the extension of the credit. Others are also likely to categorically refuse lengthening, when the risk is too high. In this case, you will only have to call on another credit institution and buy back a mortgage.
The repurchase of mortgage is a banking solution which allows the borrower to have his credit redeemed by an establishment other than the one where he took out his loan. The new organization will then settle its accounts with the initial bank and open another within it with new conditions. The repurchase of credit is an operation generally requested to resolve a delicate financial situation. By extending the duration of the credit, the new bank will apply a reduced monthly payment.
However, it should be noted that such an extension will increase the total cost of financing since you will pay more interest. To set up a loan buyback, it is possible to compare offers on a specialized platform. Once you have found the ideal offer, you will send the necessary supporting documents to the bank. And she will do whatever it takes. Note that the early repayment of your previous credit will generate fees that will be included in the redemption.
