Credit repurchase: combining consumer credit and real estate loan.
When committing to a mortgage, this is an opportunity to take stock of your financial situation. If several consumer loans are being repaid, why not ask for a consolidation of all the loans? A single rate, a single repayment period and a single monthly payment for a more comfortable budget, it is worth thinking about!
Mortgage global credit
The main element taken into account by the financial institution is the debt ratio of the household that contracts the mortgage. If this rate remains below 33%, the borrower can take out his mortgage and continue to repay his consumer loans. Otherwise, there are several solutions:
- the early repayment of consumer loans to settle the capital remaining due in order to engage in real estate credit;
- consolidating credits under a single loan to reduce household debt and increase the capacity to take out a mortgage.
This second measure is carried out in two stages: the redemption and the signing of the new loan. The last solution consists in grouping the consumer loans and then integrating this repurchase in the mortgage as soon as more than 60% of the total amount of the loan are dedicated to the real estate acquisition.
Redeem a credit including a home loan
Financial institutions generally do not see any objection to carrying out a grouping of loans, regardless of the number or types of loans outstanding. Thus, consider a credit buyout with a mortgage and several consumer loans is quite possible! This type of buyout even has a name: buyout mortgage loans.
Lending institutions easily accept this transaction since it offers a major guarantee: the property being repaid. A mortgage which serves as a guarantee for the bank in the event that the customer is in default of payment.
In addition, the repurchase of credit can be accompanied by additional cash. Each bank has its own rule, but in general, we can retain the following rule: it can amount to 75,000 USD maximum if the cash is allocated (to works for example), or 20,000 USD in the in case of a repurchase of mortgage credit, if it is free (not affected).
The costs of a loan buyback with a home loan
The repurchase of credit allows, in short, to improve the readability of the monthly payments while reducing them. This is made possible in particular thanks to an extension of the repayment period and an increase in the total cost of the loan. Note, the administrative fees in the case of a mortgage loan repayment amount to 1% to 1.5% of the total amount depending on the bank (but are capped depending on the bank and the product).