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How to renegotiate a mortgage in 2022?
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How to renegotiate a mortgage in 2022?

23 December 2021

Buying a property is an important step in life. But, before becoming a homeowner, you must go through some administrative steps in order to acquire your property. Save money to secure the necessary capital before applying for a real estate loan with the banks, compare each offer to limit the cost of interest by choosing an optimal credit rate with the lending institution and take out insurance that will provide a guarantee of repayment of monthly payments with the bank.

Once the contract for your real estate loan is signed, it is important to remain attentive to the evolution of real estate rates. In fact, when the latter drop drastically, offering a notable difference that could be beneficial to you in the long term, it is in your interest to renegotiate the terms of the contract with the lending institution and thus make some savings on your monthly payments.

Follow the advice of Paradise International to renegotiate your mortgage with your bank and thus lower the cost and interest on your loan.

Do you want to renegotiate your mortgage for the upcoming year 2022 in order to benefit from lower rates and better repayment conditions? With the current level of real estate rates, renegotiating your loan at a better rate allows you to make significant savings that translate into a reduction in interest, and therefore in your monthly payment, or in the duration of your loan. Follow Paradise International's advice on how to renegotiate your mortgage in 2022.

1. Check the profitability of the operation

Renegotiating the loan entails fees and possible penalties. The operation is therefore not always advantageous from a financial point of view.

It is generally considered that the renegotiation of credit becomes interesting when the difference in rate between the current loan and the renegotiated loan is in the range of 0.7 to 1%, a lesser difference would not necessarily be profitable. The amount of outstanding capital must also be greater than € 70,000.

In any case, the most advantageous option, as it is the one that entails the least costs, is to revise the terms of the current loan. Going to another institution for a credit repurchase remains more expensive... The various fees for setting up a new loan can reach up to 4.5% of the amount of the loan needed! So buying a loan is not always in your best interest.

2. Highlight your seriousness and your loyalty to renegotiate

Your banker is not required to accept the renegotiation of your mortgage. It is up to you to persuade them to make this commercial gesture.
To do this:

  • Demonstrate that you are within the 35% debt limit: make sure your debt load is within this limit at the time of application. Don't hesitate to pay off your small consumer loans to bring your debt ratio within the admissible limit and thus have a solid file before renegotiating your credit rate;
  • It is in your best interest to prove your irreproachable banking behavior: your monthly account statements should not show frequent overdrafts, you have the ideal banking profile which offers an additional guarantee to your bank;
  • Remind your banker of your loyalty to his establishment: seniority, direct debit of your current accounts, your investments and any insurance. Remind him/her that you provided the capital needed to make the loan when you signed the contract;
  • Don't hesitate to let people know that you have approached the competition and that other banks may offer to buy your contract at a lower cost, thus allowing you to make big savings (interest rate, insurance fees, monthly payments, etc.).

3. The 3 key points of loan renegotiation

Motivate your renegotiation request by the importance of the difference between the conditions of your current loan and those now granted. Try to obtain:

  1. A sharp drop in your borrowing rate.
  2. A decrease in your insurance rate.
  3. An exemption from administrative fees.

4. Play the competition to renegotiate well!

The banking sector, and more particularly mortgage lending, is particularly competitive. A boon for the borrower who can compete between different institutions. No need, today, to push the door of 10 establishments for that. You can for example:

  • Call upon a real estate credit broker, who will be able to make you benefit from his contacts, especially when you have a solid file and an irreproachable bank profile, giving an additional insurance on your repayment capacities
  • Use an online comparator: very easy to use, it allows you, in a few clicks, to present your financing needs, and to identify the most competitive solutions, the best interest rates and the banks to contact, as on MeilleurTaux.com .

Presenting your banker with a loan repurchase proposal from a competing institution should encourage him to accept the renegotiation in order to keep a good customer. Give yourself every chance toobtain the renegotiation of your real estate loan and thus lower the cost of interest.

Give yourself every chance to get your mortgage renegotiated.

Reference of the real estate in Collioure Paradise Real Estate recommends that you prepare your application carefully, it is essential and in your interest to have an up-to-date file.

Do not hesitate to call on a mortgage broker! He will be able to help you compare the conditions proposed by your bank for a renegotiation, and by competing establishments for a possible repurchase of credit.

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