Home loan repurchase without mortgage: explanations and cost

Do you need to consolidate your mortgage loans for more simplicity? Or do you want to benefit from new, more attractive rates? The repurchase of mortgage without mortgage is undoubtedly the most relevant solution.

How is a loan buyout without a mortgage? And above all, how much does it cost? We take a look at your questions!

Reminder: what is a mortgage without mortgage?

When you use a mortgage to finance a house, apartment, land or even professional premises, the bank takes guarantees to ensure the payment of your credit even in the event of default by the borrower.

For this, it has several solutions, the best known of which are:

  • Mortgage
  • Guarantee or registration in Privilege of Money Lenders
  • The joint surety of one or more relatives
  • The bank guarantee

With the mortgage or the Privilege of Money Lenders, you pay a notary fee and the bank can “use” the property if you do not pay your loan installments. In other words, your house or apartment is the collateral of the bank.

This is why it is recommended to carry out a mortgage repurchase without mortgage …

How to get a home loan buyout without a mortgage?

To prevent the property in which you live or rent out from being seized by the bank, resort to another type of guarantee than the mortgage is ideal.

Be aware that you have an outstanding mortgage with your current credit, you will need to proceed with a “mortgage release”. This is chargeable, but allows you to use another type of guarantee, less expensive and less risky.

Have a solid file for the new credit agency

It seems obvious, but you will have to show “white paw” to put all the chances in your side. Not only will the rate of your mortgage repurchase be more favorable, but in addition the financial institution may consider other guarantees than the mortgage.

Thus, you will have to be convincing and provide guarantees to the bank. These are of several kinds and can be combined with each other:

  • Stability of employment: a permanent contract for more than 3 years, non-stop fixed-term contracts, stable or increasing turnover for several years, a recommendation from the employer, etc. are highly valued items
  • Impeccable bank accounts: remember to take care of your account statements for the last three months, or even the last twelve months, to show your future banker the good management of your cash flow
  • A reliable co-borrower or a guarantor: this one can help you bring the solidity which your file lacks, since it undertakes to pay up to the amounts defined in agreement with the bank

In short, a credit redemption is not a loan transfer. It is a new loan, relating to the same property as the previous loan. Indeed, your old credit is settled and your new credit takes over. A solid file remains the best way to subscribe to a mortgage-free loan buyback.

Be proactive to give confidence to your new financial institution

You have offered guarantees for your mortgage repurchase, up to your possibilities. This will be appreciated, but you can go even further to lower rates and avoid the mortgage.

A loan is above all a contract that commits two parties. If you give a little more, the trusting relationship works both ways. Never neglect the human factor and make a gesture towards your new establishment:

  • Repatriate your savings to your new establishment
  • Ask for quotes for your auto, motorcycle, home insurance, etc.
  • Also consolidate your consumer loans in the new loan
  • Suggest the opening of a life insurance, a passbook, a PEA with your future banking partner

There are many solutions to attract and obtain a mortgage-free home loan buyback. Do not be afraid to negotiate while knowing how to give, remember the adage “we have nothing for nothing”.

And of course, the reflex to have in all circumstances remains to compare the mortgage-free loan repurchase offers before signing …

How much does a repurchase of credit without a mortgage cost?

The repurchase of mortgage without mortgage is an ideal solution if you want:

  • Reduce the amount of your payments by extending the duration of the credit
  • OR save money by redeeming your loan with more advantageous rates and guarantees
  • AND keep your goods without them being seized by the bank

The cost of mortgage repurchase will depend on many elements, the most frequent are as follows:

  • Mortgage or PPD release fees if they exist
  • Prepayment charges for the previous mortgage (s)
  • The amount of administrative fees taken by the new banking establishment
  • The possible pricing to match your borrower insurance to the new loan conditions

As you can see, there are many criteria to calculate the cost of a loan buyback. It is generally considered to be very attractive if you are in the first third of your payments, attractive if you are in the second third, and unprofitable if you are in the last third.

In order to see if the mortgage-free mortgage repurchase is a profitable operation, do not hesitate to use an online comparator to put the banks in competition.

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