Buying mortgage credit and repurchase mortgage… It is tempting to think that it is a single operation, especially since the purpose is a bit the same: you save on your monthly payments of ready. But these are two different operations. We explain why.
The purchase of mortgage credit
A repurchase of credit consists of consolidating all or part of its loans to pay only one monthly payment. All non-professional loans can be included in the operation: home loan, consumer loans (personal loan, revolving credit, auto loan…), etc. Tax debts and bank overdrafts can also be grouped together in the transaction.
Types of credit redemption
There are two types of credit redemption (also known as credit consolidation or debt restructuring):
the purchase of consumer credit. Only consumer credits are grouped together;
and the purchase of mortgage credit. A home loan is added in the transaction which is necessarily secured by a mortgage.
The benefits of credit redemption
By paying only a monthly installment and increasing the duration of the loan, you reduce your debt ratio. This allows you to restore a financial situation that has deteriorated. But we must not see the redemption of credit as a solution to only reduce its debt. By lowering your monthly payments, you can find new savings capacity. You can also invest more easily in a new project: purchase real estate or car, realization of works…
The purchase of real estate credit
The repurchase of mortgage has represented in the last months the bulk of the production of mortgages (more than 60% in January 2017). This seems surprising but in this period of very low bank rates, the success of this operation makes sense. It allows households that borrowed a few years ago at a significant interest rate to renegotiate their loan on current financial terms, much more advantageous (by lowering the interest rate or the borrowing period). And so to achieve significant savings.
You can renegotiate your home loan with your bank (in this case, it is called credit renegotiation), but the lender, by lowering its interest rate, loses money. In other words, this type of application from his bank is generally refused, you will have to go through another institution.
Note that the operation is not always profitable. For this really interesting, the proposed real estate rate must be at least 0.80 point lower than the old rate. As for the remaining capital, it must be more than 70 000 €.
In sum, the difference between repurchase of mortgage and repurchase of mortgage credit results in the number of loans bought back. The first only takes into account the mortgage loan while the second includes several financings, in addition to the mortgage.