To buy your main home or other real estate, you can buy back credit or consolidate a loan to buy a new home. Explanations.
Include a mortgage in a loan repurchase
The housing market has shown exceptional dynamism since 2016 and for good reason, real estate is one of the preferred investments of the people. Whether to make it their main or secondary residence, or to make a rental investment in order to collect additional income, many borrowers wish to finance their house or apartment by using a bank.
The credit consolidation allows a household to assemble various loans (real estate, consumer, and other debt) in a single funding. This financial operation has been successful for several years since it allows a borrower to lower the amount of the single monthly payment to be repaid. However, it is the lengthening of the repayment period of this loan which allows the reduction of maturities and can therefore lead to an increase in its total cost.
The loan repurchase offers the beneficiary the possibility of acquiring a property, while having his credits redeemed. This operation is simple: the old credits are grouped into one while the sum necessary for the acquisition of the new property is also included. The financing will be allocated at a single interest rate and the household will be taken only once a month.
Home loan with a credit consolidation: the advantages
The repurchase of credit is a solution which allows many borrowers to become owners, while reducing the monthly payments to be repaid to the lending establishment. The operation is unique for each beneficiary since it adapts completely to the finances and needs of the home and their long-term projects.
Sometimes, it is the too high debt ratio which slows down the family’s real estate project, the modification of the duration of the financing induced by the grouping of credits lowers this rate. It is in particular for this reason that the borrower can include an additional sum to buy his home.
Depending on the borrower’s financial situation, his credits being repaid and the mortgage he wishes to include in the loan repurchase, the repayment period will change to find the monthly payment suited to his income. The operation also consists in having only one loan and therefore a single bank contact and a single withdrawal from his bank account.
Taking out a home loan after buying back loans
Another solution is however possible: that which consists of grouping your credits and having only one reduced monthly payment, then returning to your banker to take out new financing in order to buy an apartment or a house.
After the loan consolidation, the borrower will have a healthier financial situation and the management of their accounts will be facilitated, which is a good point for banking establishments. However, depending on the amount of the loan that the household wishes to benefit from to carry out its new project, the bank may hesitate to grant new financing due to the debt ratio. Credit organizations will systematically refuse a new loan if it is likely to change the sustainability of its finances.
Conversely, if the household is eligible, it can take out a mortgage with an interest rate that is sometimes more advantageous, especially if it can provide a personal contribution.