When and how to renegotiate your mortgage credit?
As you know, mortgage rates are historically low and this is very good news for all those who have already taken out a mortgage. So how do you go about it and is it still profitable? Here is our question and answer of the day!
What is the purpose of a renegotiation?
Renegotiation has two advantages:
- Reduce the amount of monthly payments until the end of your reimbursement.
- Reduce the duration of your loan without changing the initial monthly payments of your mortgage.
How to put the odds on your side?
It is not enough to arrive with your hands in your pockets, even when you speak to your usual banker and here are the steps not to be overlooked:
- Compile a complete file: you must in fact collect at least your last three account statements as well as your pay slips. A health check is also an additional asset.
- Beware of other credits: the best is to repay all your consumer credits but if this is not the case, make sure to have only one creditor who will group the whole.
- Being a good payer: this goes without saying of course and to prove your worth, you must have paid ruby on nail your credit over a minimum period of one year. For many banks, it is from the second year that renegotiation can be considered.
How to renegotiate with your bank?
You must first know that your bank is not required to contact you to offer you a new credit rate. It is up to you to manifest yourself by informing yourself beforehand about the rates offered outside. Insofar as your bank accepts in order not to see you leave for another establishment, take into account that this renegotiation still involves a series of costs which notably involves the new study of your file.
How do you deal with the competition?
By looking on the side of other banks, you will surely find more attractive offers, the purpose of an establishment is obviously to welcome new customers. However, in the event of a change, the administrative costs are not negligible and your old bank is entitled to require before your departure a prepayment penalty which represents up to six months of interest on the capital remaining due. But these costs are legislated and represent only 3% of the capital.
To know: If you have only a little free time to compare the different rates or that all these calculations are not your strong point, it is interesting to go through a broker in rates of credits so that this one presents you different simulations taking into account the profits and other costs generated by this operation.
Can you negotiate your borrower insurance at the same time?
Here’s a way to save more, and these other fees may be associated with your loan repurchase when you switch banks. However, like the renegotiation of home loans and to better choose your new bank, the latter and your old bank are required to present you with a panel of eleven similar guarantees.
And you, do you find it interesting to renegotiate your loan? Have you already done so and are you satisfied with the savings? Tell us about your experience, the blog is there for that!