Mortgage loan repurchase: procedures and simulation

Mortgage repurchase refers to mortgage repurchase operations or loan consolidation with the taking of collateral for real estate belonging to the borrower.

In other words, the repurchase of mortgage credit can only be considered by the owners. The repurchase of credit can meet two different objectives depending on the situation of the borrower: the reduction of monthly payments or the decrease in the total cost of the loan (s).

Reminder: what is mortgage loan repurchase?

The repurchase of mortgage credit is operated by a traditional banking establishment within the framework of the repurchase of mortgage. Conversely, it is operated by an organization specializing in loan repurchase for credit consolidation.

In all cases, it consists of the balance of outstanding loans through early repayment, and the opening of a new loan at a single interest rate in a competing banking establishment.

When the repurchase of credit is said to be “mortgage”, this means that the new financial organization requires the taking of a real estate mortgage in return for its financing. If the repurchase of mortgage credit is not systematic in terms of repurchase of mortgage credit, it is almost always in terms of consolidation of credits.

The steps to set up a mortgage loan repurchase

Find the loan repurchase organization

This is of course the first step to take. Be aware that you will not contact the same people depending on whether you want a mortgage repurchase or a credit consolidation.

For the repurchase of mortgage loan, you can take steps yourself the national banks having established ones on the street, use an online simulator or get closer to a broker specialized in mortgage loan.

On the other hand, the credit consolidation is not operated by the banks but by their specialized subsidiaries. They are not directly accessible to individuals. As a result, you must therefore use an online loan simulator to be put in touch with a broker, or get directly closer to a broker specializing in credit redemption.

Whatever solution is considered, you will know very quickly if your mortgage loan repurchase request is accepted. If this is the case, it will be necessary to set up the mortgage requested by the lending institution.

Set up the mortgage

Who says mortgage says compulsory recourse to a notary. You will therefore have to contact this professional to set up the mortgage on one of the real estate that you own.

Know that the value of the mortgaged property must be greater than the amount of the loan put in place. This operation before a notary represents approximately 2% of the amount of the new loan. Rest assured, however, mortgage costs are taken into account in the APR that is communicated to you.

If you already had an existing mortgage on the redeemed loan, it is automatically closed when the prepayment takes place.

Advantages and disadvantages of mortgage loan repurchase

The advantages of mortgage loan repurchase are numerous: simplified and more easily granted financing, preferential interest rates, possibility of adding a new loan to the operation or a cash loan. In short, the mortgage offers the credit redemption organization real security that makes negotiations easier.

On the other hand, know all the same that the repurchase of mortgage loan requires a certain formalism which does not facilitate its implementation. It is not only necessary to assess the real value of the property taken as collateral to estimate the portion to be mortgaged, but it is also necessary to wait longer due to a longer processing of the file, in particular by notarial intervention.

Using an online mortgage loan repurchase simulator is simple, free, fast and without obligation. It allows you to estimate the amount of your future monthly payments and the APR to which you could claim. For all practical purposes, an in-depth study will be necessary to validate your file.