When mortgage rates fall, it is a boon for buyers. But households that took out credit before the rate cut could also benefit. The solution is through renegotiating credits. Here are the things to know.
How is the operation carried out?
The renegotiation of mortgage loans is carried out in two stages: first, the contracting of a new loan ; second, an early repayment of the original credit.
Which profiles are concerned?
Not all borrowers are eligible for credit renegotiation. The difference between the current rate and that subscribed by the borrower must reach at least 0.60 point for the transaction to be really interesting. The reason ? A significant rate difference is necessary to offset the renegotiation costs.
In the same vein, the operation is advantageous for loans contracted recently, when the loan is at the stage of repayment of interest. As for the outstanding capital, the higher it is, the more attractive the renegotiation will be.
Play the competition
Do not hesitate to go to several banks to better negotiate your rate cut. Another solution is to hire a broker. As such, Good Bank supports households in their renegotiation of mortgage loans.
Formalities close to those of a conventional home loan
As with a mortgage, certain essential documents must be provided, such as the last three pay slips and account statements. The borrower must therefore be vigilant about his expenses, possible arrears or when he subscribes a consumer credit.
Another similarity: he will receive a loan offer if accepted by the bank. The conditions are the same as those of a mortgage: reflection period of ten days, then new deadline to return the offer to the bank. The law governs these deadlines: offer to be returned from the 11th day and until the 30th day following receipt of the loan offer.
Finally, if the first loan is covered by a mortgage, it must be raised by the notary of the borrower.
What parameters should the borrower take into account?
The borrower will have to find the right balance between the term of the new loan and the amount of the installments.
What are the costs of renegotiation?
The cost of the operation is equivalent to an average of 5% of the capital owed (CRD). The costs include the early redemption indemnities (6 months of interest to be paid, capped at 3% of the capital remaining due), guarantees and administrative costs. These costs are taken into account by the advisor to calculate the profitability of the credit renegotiation.