Credit renegotiation tackled by Capital
There are many media outlets talking about the rate cut, M6 will broadcast on Sunday March 8, 2015 at 9:00 pm a report on real estate including the presentation of the loan renegotiation.
To know about credit renegotiation
It is a banking operation which consists in reviewing the terms of repayment of a mortgage. This is an amendment which sets out the new terms: rate, duration, monthly payment and therefore schedule. This is what is put in place when the renegotiation is carried out with the lender of the original loan.
Otherwise, a new credit contract is put in place if the borrower decides to use a competing institution (bank, banking intermediary). In this specific case, early repayment indemnities are to be expected, they cannot exceed 3% of the amount to be repaid.
The Capital issue on the M6 channel will therefore present this solution, the advantage that can be drawn from it and the advantage of going through a broker, the economic situation lends itself very well to this operation.
How to successfully renegotiate credit?
First of all, the mortgage must be in its first years of repayment (5 at most on average) because it is at the beginning that we reimburse the interest and it is therefore at the beginning that we can realize a gain on the cost of credit.
The initial rate must be at least one point higher than the new rate presented, otherwise the gain will not be significant and the borrower could even lose money with the various costs of the transaction.
Negotiate! And yes, today we can negotiate its rate, the application fees and the early repayment indemnities (of the new contract). You just have to play the competition (internet, broker and bank) in order to obtain an attractive offer.
Brokers, is this the right plan?
M6 takes for example a renegotiation of credit with a broker, this can be very effective for a borrower but it is advisable to take a few measures before getting started.
First of all, the Lagarde law categorized brokers, they are now intermediaries in banking operations (BIOs) divided into 4 categories: brokers (mandated by the client), exclusive agents (mandated by a single credit institution) , non-exclusive agents (mandated by several credit institutions) and intermediary agents (mandated by the 3 preceding ones).
This information can be verified with ORIAS, directly on the website, just fill in the name of the brand you have contacted to ensure that it is an organization in good standing. To return to the IOBs, they are remunerated by a commission (or mandate) on the renegotiation of credits. In other words, these establishments are more open to negotiations because they prefer to reduce their costs rather than losing a file. They are generally experts in their fields and are able to find very interesting offers. It is advisable to read the credit contract well before signing it.
Renegotiation is not a credit buy-back
Even today, borrowers but also the media confuse a mortgage loan renegotiation operation with a grouping (or repurchase) of credits.
If the renegotiation concerns only the mortgage, the repurchase concerns all types of loans. However, this is not an amendment but a redemption by the new lender of the old stocks with the carryover of the sums due over a longer period and offering a smaller monthly payment. During a repurchase, there is an increase in the total cost of the credit which is linked to the extension of the term but also very often to the addition of a new project by the borrower.