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Real estate loan buyback with mortgage: all you need to know

Different banks and credit institutions offer mortgage guarantees in the context of a mortgage loan repurchase, an often effective solution when the conditions and guarantees of the borrower are insufficient.

It sometimes happens that the monthly payments become heavier, in particular the monthly mortgage loan which can represent a significant part of the loan repayments. In order to avoid an imbalance in the household’s financial situation, the banks offer to buy back a home loan in order to readjust the repayment conditions. To put it simply, the bank will offer to reschedule the repayment duration, which will have the effect of reducing the monthly payment. It is also possible to add consumer credits to group the various loans into one.

 

The borrower is the owner and has a mortgage loan outstanding

mortgage loan

the bank will offer a mortgage loan repurchase, a guarantee often very common in consolidation operations. The surety companies are very demanding and very attentive to the guarantees provided by the borrower, the latter are generally not positioned in loan repurchase operations including several credits, it is, therefore, the mortgage credit institutions that will have the best solutions.

 

Advantages and disadvantages of buying back a mortgage loan

mortgage loan

The mortgage is a more extensive guarantee than on a conventional bond, the rates are generally more attractive because the property offered as a guarantee will reassure the bank and above all have more flexibility in its financing. The mortgage can, therefore, be redeemed and the duration may even be spread over a maximum duration of 35 years. As such, only banks specializing in mortgage lending are able to position themselves over periods of 420 months, with attractive rates and conditions that will be difficult to find elsewhere. Obviously, all this will require an important study, and in particular the calculation of the mortgage rate (loan ratio calculated according to the value of the property).

The studies of repurchase of mortgage with a guaranteed mortgage are generally longer than on repurchase of a traditional loan, it is necessary to estimate the good, to quantify the amount of the repurchase and to carry out the feasibility study by taking account of the situation of the borrower. The implementation of the mortgage guarantee will also involve going to the notary in order to register in the mortgage register, an approach that generates additional costs but these will be merged in the financing. Finally, if a mortgage is already present, the bank will ask to release it, that is to say, to raise the existing mortgage so that the new one is put in place, again fees are to be expected.

 

Get a mortgage buyback estimate with mortgage

mortgage loan

To date, the mortgage is the most effective guarantee in terms of financing conditions, some credit institutions are specialized in this type of guarantee and offer specific products around the repurchase of mortgage loans. It is for example possible to redeem a single home loan, just as it is possible to combine several credits at the same time including consumer loans. It is also possible to finance a new acquisition with the repurchase of credit or even to include an envelope that can be used to finance the works. The mortgage guarantee, therefore, provides more solutions and freedom than a conventional guarantee. It is possible to operate a simulation online, taking care to specify the amount of the current mortgage and any other loans to be bought back.

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