Before considering how to buy back your mortgage, it is necessary to establish a precise comparison between the existing financial situation, that is to say if you leave your credit as it is with the results obtained in the event of renegotiation.
First of all, you should know that during the first years of a loan, the share of interest that goes into the composition of a monthly payment is greater than the depreciable capital (debt actually repaid to the bank).
By renegotiating your loan, you will start paying more interest than capital. That’s why most studies prove negative for old loans.
Renegotiate loan insurance
Of the eight steps we take to find out how to buy your mortgage, calculating loan insurance is one of the most important aspects. Submit to the bank a delegation. Indeed, since the Lebarde Law, it can not force its customers to subscribe to its group contract.
This is the right opportunity to get competition back on track, because the current insurance contract can be terminated because the loan on which it is based will be repaid on renegotiation.
But it is also an opportunity to review the various guarantees. If you are in a precarious situation, think that the unemployment option of loan insurance contracts may be useful, even if their guarantees are capped.
Remember to read carefully the new contract that you will subscribe. Check that you have taken out partial disability (IPP) which covers you from 33% disability and especially, read more specifically the chapter on exclusions in the general conditions.
Finally, this may be the time to make a pension balance sheet. The situation you were in several years ago has certainly changed.
Choose the guarantee
If you are still wondering how to make a successful purchase of your mortgage, it is time to say that only a point-by-point negotiation leads to a satisfactory result. After negotiating the interest rate and settling the insurance problem, you will have to worry about the guarantee that will be the new loan.
Caution: If the unit has been mortgaged, you will need to release. Count nevertheless 1200 € for an initial loan of 200 000 €.
For the new guarantee, we advise you to avoid the real sureties, that is to say the mortgage or the lender privilege of money. Prefer a mutual guarantee type credit-housing, because you will benefit from a more flexible system, cheaper and which in addition gives you back two thirds of the contribution at the end of the loan.
Namely: if the amount of the renegotiation is not very high, consider offering to put in guarantee a placement in progress, for example a life insurance contract multi-support or invested on a fund euros.
It must be admitted that the processing fees do not have a very significant impact on the cost of credit, but they are nevertheless an expense and it is a position that deserves to be negotiated. Count 1% of borrowed capital with a capping of the expense according to the amount of the loan.
Know also that the bank justifies the existence of expenses of file by the expenses which it engages to mount the file, but also to analyze each elements which composes it and carries out certain controls (file FICP, etc), which is perfectly justified.
However, depending on the amount of mortgage you want to redeem, you can argue that the analysis of the elements of your case will not cost more than for a loan less than half. Clearly, the amount of the loan does not affect the level of expenses incurred by the bank to study the file.
In our opinion, we must not pay:
- More than 500 € for a loan whose amount is less than 100 000 €
- More than € 800 for a loan of more than € 100,000
Calculate the final cost of your mortgage with our calculator
This is another important point of loan redemption. First of all, check that in the offer of the loan you want to buy back, this penalty is provided. But do not be fooled if you did not negotiate this point during the subscription, there is a good chance that the penalty is there.
The amount usually amounts to 3% of the outstanding capital (maximum allowed by law).
If you redeem your mortgage in the same bank, you will likely have it as a gift. If you go to the competition, it’s lost.
However, remember to negotiate the absence of penalties if you address the competition. You can easily find a compromise if it is reluctant and offer for example to remove them after 5 years or in case of resale of the good, etc.
The credit broker has its usefulness, but you may have a fee to pay so additional fees. Know that these fees are negotiable. Do not hesitate to put several brokers in competition.
On the other hand, the MURCEF law prohibits any intermediary in banking operation (on which the broker depends) to collect remuneration until the loan has been granted.
If you have one or more consumer loans that you want to renegotiate at the same time as you redeem your mortgage, your transaction is part of the credit restructuring. This will be a more complex operation
Traditional banks do not like this type of transaction too much. You will therefore have a lot of chances to see your loan request refused by the network banks.
The only ones who risk accepting your file are the Specialized Establishments, which unfortunately generally offer a solution with a variable rate, which we invite you to categorically refuse.
Also beware of brokerage fees in this area. They are often higher than in mortgage brokerage. Finally, know that there are reprehensible practices, some commission-hungry brokers are sometimes ready to do anything to make a case.