Avoid 6 mistakes when refinancing a building savings loan

If there are offers with lower interest rates to repay the loan, as it is now, it is obvious to look for refinancing of the building savings loan. Why? Building savings loans have the same interest rate throughout the loan repayment period (unlike mortgages with a period of approximately 5 years fixed interest), usually around 5% (mortgage interest rates are lower). But even in refinancing the loan you may come across , so avoid the following 6 mistakes.

 

1. Refinance in the bridging period

1. Refinance in the bridging period

Without at least two years of building savings, reaching at least 40% of the target amount and reaching the required rating number, you are in a bridging loan that is not very convenient for larger loans. Before paying off the loan at all, you pay interest on the target amount, you grow up and you do not actually die. The interest rates are between approximately 4.5 and 7%. If you want to switch to refinancing at this stage, you will also have high fees or penalties – the bridging period is fixed – and complicated refinancing conditions to limit the outflow of clients from building society loan providers. Therefore, it is sometimes better to wait for the refinancing of the loan until the bridging period is over. Or check that you have no fixation in the loan agreement agreed for the bridging loan phase – which, as with a mortgage, gives you the option of early repayment without penalties at the fixation date.

 

2. Unpredictable mortgage interest

This is not the fault of the payer of the loan, but rather a statement about the market situation. Although the current situation in the mortgage market is very good and mortgages with interest rates of around 3 to 5% are on offer, no one will guarantee that further developments will not have an upward trend. On the other hand, the building savings loan has the advantage that its interest rate remains the same throughout the loan repayment period . Therefore, it is worthwhile to consider and refine the market and your own wallets when considering refinancing.

 

3. You do not work with complete information

Yes, it is difficult to understand the offers of individual banks. But if you do not have complete information from everyone, it is difficult to compare it successfully. Do not be afraid to look for the information you are missing in the proposal and then ask your bank to add it.

 

4. You are putting aside home furnishings

financial loan

When refinancing a building savings loan, the loan can be increased and the given amount used, for example, for other household equipment. If you know you need to replace windows or finally buy a new kitchen, consider incorporating these costs into one contract.

 

5. You are a decision, but you forget to take all documents to the bank

bank loan

If you decide to transfer the loan to another bank, you need to have all the final building inspections (those that were secured in the original loan) and the current address of your permanent residence registered at the cadastral office. If you also want to change the property insurance, check the current risk assessment (eg floods) to see if the property is newly included in the more expensive zone.

 

6. You do not count all the costs

Only after you have calculated all the additional costs do you have to answer the question whether refinancing the loan is still beneficial for you. In addition to the account maintenance fee, there are other fees that the bank requires when handling a mortgage: a loan processing fee or a new estimate fee. In addition, your original building society may charge a fee for issuing a quantification on a specific date and an early repayment fee in the bridging period. You will pay a thousand dollars for the entry of a new contract into the Land Registry .  

What are the elements, other than income or expenses, which are taken into account for the assessment of a tenant credit refinancing file?

The calculation of charges and income is used to determine the debt before and after restructuring the home.

But if debt remains an essential element in the assessment of a loan file, other criteria are important:

But if debt remains an essential element in the assessment of a loan file, other criteria are important:

The “remaining to live”, or family quotient, which is the difference between the cumulative of your income and the cumulative of your expenses (that is to say what you have at the end of the month to live). 

The good management of your bank accounts and the absence of expenses that are too regular could suggest that there is an addiction to games of chance for example.

The credit repurchase institution assesses a repurchase file as a whole. This means that none of the criteria cited above justifies an agreement or refusal of a loan. The supporting documents for a credit file must correspond to all the criteria and are analyzed as a whole, the decision of the credit institution is made on the whole of the file and not on a few points taken separately.

How does the tenant loan buy-back work?

When a tenant can no longer make ends meet or their living space is too low, they can look for a bank to buy their consumer loans. This operation is intended for borrowers who have subscribed to at least 2 consumer loans and who rent their main residence or who are hosted by their families. It consists of combining several bank loans into one in order to benefit from a reduction in monthly payments. The reduction of the amount of the single monthly payment can reach 60%.

The credits that can be grouped are as follows: revolving loans, assigned credits, personal loans, work loans as well as bank overdrafts, unpaid rents, family debts, unpaid taxes. In some cases, this assembly can relate to the financing of secondary residence.

This operation, which can be carried out by a bank, a credit institution or a broker, allows you to benefit from a single loan granted at a fixed rate over a longer period. Revolving loans at the adjustable rate will thus be transformed into a fixed rate. The total amount of debt that can be grouped is limited to 100,000 USD. This amount will be reimbursed over a period of 10 years. This type of transaction does not require a bond or mortgage guarantee.

This arrangement, which simplifies the management of its budget, does not require a change of direct debit. The bank can also agree to grant an additional amount called “cash” as part of this operation if the borrower is eligible for this additional loan. This optional envelope is integrated into the total cost of the operation and therefore benefits from the same renegotiated rate for the repurchase of tenant loans.

Just like other conventional loans, the borrower must provide a certain number of files when setting up this operation, here is the list:

  • double-sided copy of the subscriber’s CIN or passport as well as his family book
  • copy of marriage certificate or divorce decree
  • documents justifying direct debit (telephone or electricity bill)
  • photocopy of the rent receipt and the housing tax
  • RIB and its last three pay slips as well as bank statements for the last three months
  • copy of the last tax notice
  • copy of the loan amortization schedule and a document showing the principal owed

If the redemption candidate wishes to obtain this debt consolidation quickly or if he wishes to maximize his gain with this operation, he will do better to call on a broker who helps him find the most affordable interest rate while negotiating the other elements of the redemption. Note that the assistance of a broker pays only if the borrower finds satisfactory the loan repurchase offer that he has found for him and that he signs it. This signature of the buyout proposal allows the effective implementation of the transaction.

What to do in the case of a tenant with a FICP file or who is highly over-indebted?

What to do in the case of a tenant with a FICP file or who is highly over-indebted?

Some candidates for this operation are victims of a hazard in life which affects their ability to repay. This prevents them from honoring their monthly payments over time. Difficult ends of the month and rejection of direct debits can then go as far as FICP filing or an explosion in their debt ratio.

Before knocking on the door of the Cream Bank to file an over-indebtedness file, these borrowers can use the simulation tool on our site. We study all profiles and under certain conditions, this type of borrower can claim the repurchase of tenant credit.

Credit for young families.

Loan for young families can help to cope with the costs

Loan for young families can help to cope with the costs

Unfortunately, young families do not only enjoy happiness. With the offspring, the expenses also come to the new parents. The joy of the offspring is limitless and the proud parents want to put the world at their children’s feet and fulfill all their wishes. How difficult it is often to look no further than to look into the bright eyes of a child. But nothing is as constant as the change in childhood. If the family’s budget has just recovered from spending on baby equipment, the purchase of a children’s room must already be considered and planned.

In addition, the children are constantly growing out of their favorite clothes and, incidentally, the desires for toys and more are immeasurable. But it is not only for the children themselves that expenditure is increasing more and more . When starting a family, parents also face decisions that involve some costs. It is not uncommon for the offspring to buy a family-friendly car. New and above all larger household appliances such as refrigerators, washing machines and tumble dryers are often required.

Sometimes the enlargement of the family even requires more space. Then only a move to a larger apartment helps, which means additional costs for the young family. Since these expenses often do not go hand in hand with the right budget, in most cases only a loan for young families can help to cope with the costs.

In principle, children are no obstacle to a loan.

In principle, children are no obstacle to a loan.

As with any other loan request, a lender assesses the applicant’s creditworthiness when it comes to a loan for young families based on their financial and income situation. It is therefore no longer a hindrance to the credit prospects of a young family if one parent takes care of the household and raising children at home, while the other parent is responsible for the livelihood of the entire family. If the working parent’s income is sufficient to service the loan, there is nothing standing in the way of a loan for young families.

Like any other non-earmarked loan, a loan for young families is issued by the house bank or a direct bank from the Internet. The individual loans differ according to the loan amount, the term and the interest rate requested by the lender. The lender sets the interest rate taking into account the creditworthiness of the applicant. The current financial needs of the young family is the most important factor influencing the loan amount applied for. The maximum possible monthly charge from the loan repayment rate has a significant impact on the term of the loan. On the one hand, every applicant wants to repay the loan as quickly as possible in order to avoid unnecessary costs due to interest, on the other hand, the amount of the installment must not be so high that the family’s remaining budget is insufficient until the end of the month.

As unexpected costs often arise, especially for young families, the term of the loan applied for should not be underestimated for safety reasons. Additional collateral for the lender, such as grandparents as guarantors, can result in the required interest rate falling and a longer loan term becoming possible. This option can provide considerable relief, especially for families with relatively low incomes.