Buying credit when you own, is it easier?
October 27, 2019
The credit buyback market is split between two types of targets, with borrowers renting their home and homeowners. To have a property is more advantageous in the context of obtaining a repurchase of credit.
Mortgage guarantee in repurchase of credit
The repurchase of credit is a transaction allowing a borrower to redeem his various credits to readjust the terms of repayment, that is to say reduce his monthly payment and rebalance his budget. There are two profiles identified by banks, people renting or lodged and the owners of their homes. In the context of an owner, there is real estate that can be taken into account.
To gain access to the property, buyers have often taken out a mortgage, for some it is a consumer credit affected but what is important to remember is the existing property that can serve as a guarantee . The bank is therefore more reassured about the repayment conditions because its client has a patrimony, which can be mortgaged in case of default of repayment. A situation to avoid but which makes it easier to obtain a buy back of credit.
The different cases of the acquisition of homeowner loans
If the real estate can provide an additional guarantee for the bank, not all borrowers have the same need and the property can sometimes be spared, ie it is not included as a mortgage guarantee.
Consumption and mortgage loans
Firstly, there are the owners who have consumer loans and a mortgage loan in repayment, the bank will offer to buy everything to offer a single rate and a reduced monthly rate. In this case, the mortgage will be necessary because the amount will probably be large.
Consumer credits and tail of mortgage
A tail of mortgage is simply a loan arriving at almost the end of its repayment, in this case the bank will not buy it because it has no interest as the loan will soon be closed. It may however require a mortgage if the amount of consumption credits is important or if the borrower wants to buy a new property for example.
Consumer credits only
It will be a buyback of consumer loans, a mortgage can be requested but it remains relatively uncommon given that no mortgage will be bought back. The homeowner borrower will obtain new repayment terms with a lighter monthly payment.
Each situation is specific and requires a personalized study, so it is possible to obtain a first estimate of funding by using for example an online simulator. The interest is to simulate the regrouping of its various credits to compare the proposed situation to the current situation, it is a great way to project itself in the repayment of new monthly payments. Some banks are also specialized in proprietary profiles and offer tailor-made offers for these borrowers.