Want to become owner for the second time? But the household has already accumulated several credits? A second real estate purchase can be made by consolidating loans. The amount allocated to the acquisition of the future residence will then be directly integrated into the new credit subscribed as part of the repurchase transaction. The advantage? The borrower will reimburse one and the same credit obtained at a favorable rate and will have to do only one credit agency. On the other hand, thanks to an extension of the total repayment term, monthly payments will be reduced.
What is the redemption of credits?
When a borrower holds several credits in repayment, the many monthly payments often add to the daily budget of the home. The redemption of credits is a particularly advantageous solution in this case. This consists of substituting a single loan for all credits and debts in force. As soon as the assembly is set up, it is possible to negotiate a lower rate of borrowing and to obtain a single monthly repayment rate lower. In return, the overall duration of the loan is spread over a longer period. The borrower therefore gets easier conditions which allows him to better control his budget.
In practice, the operation consists in obtaining from a lending institution that it reimburses in advance all the other loans in progress, while the borrower subscribes to a new loan that includes all of them. Regarding the costs related to the early repayment of said credits, each bank practices a different policy, so it will be necessary to be vigilant on this point to be sure that the assembly is advantageous and allows to achieve real savings.
Consolidation of loans is possible for a personal loan for consumption, for a mortgage or debts related to a bank overdraft. Tenants and owners are eligible provided that the borrower is not registered at the Francia bank.
What is a complementary cash flow?
When a household wants to buy a second property to make a second home or simply to become a second owner, it is possible to realize this real estate project through a pool of loans. For this, it will be necessary to make a request for complementary cash which will be directly integrated in the contract of repurchase of credits.
Specifically, at the time of the request for redemption, the borrower will be granted the amount necessary for the purchase of his second home. This will then be added to the total amount of outstanding capital. The main advantage of a financial arrangement of this type lies in the fact that the borrower can buy a new house or a new apartment without having to subscribe to another credit.
How much should I borrow?
When considering buying a second property to live in or to make a rental investment, it is important to put in place a financing plan to avoid being in a difficult financial situation. Several key criteria are to be taken into account such as the debt capacity and the rest to live of a household. These make it possible to determine the amount that can be allocated to a borrower at the time of a purchase of credits. Indeed, it will be difficult to obtain a buy-back agreement if the lending institution considers that the inclusion of this amount in the credit is a financial burden too important for the household.
To know its need in cash, it is important to take into account the various expenses related to the purchase of a property such as notary fees, fees and of course the amount needed to buy the housing in question. On the other hand, we must not neglect the debts and financial obligations of the home. From there, it will be possible to have a clear overview of the household’s remaining livelihood and thus its actual ability to add an embedded credit within the buyback transaction.
As part of a second real estate investment, we will usually talk about a so-called cash flow because it will be used exclusively to finance this project. This is a very effective alternative for financing certain projects without subscribing to an additional loan. This allows you to make significant savings on the costs of a conventional home loan.
How to find the best deal?
Before embarking on a project of this size, it is essential to study the market well. Indeed, faced with the multitude of actors present, it is not always clear to see clearly, that is why, the stage of research must absolutely not be neglected. Individuals who are considering using a credit redemption to access the property a second time can turn to the services of a broker or do their own research via the various platforms available on the web.
The first option, that of the broker, allows an individual to delegate the research and administrative part to it. This professional is an actor best able to direct him towards the offer best suited to his needs and his budget. Knowing the market and the situation of his client, he can offer several quotes so that the borrower gets the best possible repayment terms. When the goal is to obtain additional cash, it can also be of great help in terms of financing plan. It will also be valuable at the time of the constitution of the file and will take care of all the steps necessary to the realization of the signature of a contract of regrouping of loans.
If you want to do the research yourself, the latest generation of tools available to all Internet users can now get a free quote very quickly. For that, it is enough to inform the basic information such as the number of credits in progress and concerned by the assembly, the capital remaining due, the incomes of the borrower, to know very quickly the cost of the future redemption.
The mounting of the file, the essential step
Even more than for a classic loan buyback, when you want to get additional cash to buy a second home, it is very important to build a solid record.
Notice of taxation, income of all members of the household, statements of savings books, copy of the housing tax, property tax or pensions collected, all documents that indicate the financial stability of the household. borrower are arguments that will play in favor of the borrower.
This file will be scrutinized by a special committee that will subsequently agree or not to validate the implementation of a buyback operation.
This will also be taken into account to set the amount of the borrower insurance contribution. If this is not mandatory, it is still strongly recommended to be granted a redemption of credits. Good to know also: it is possible to subscribe to a borrower insurance in a different institution than the one in which the purchase was initially subscribed. Depending on the policies and pricing schedules, it is sometimes possible to achieve significant savings.