The principle of subscribing to a home loan including a purchase of consumer credit is identical to the loan consolidation with an additional cash demand. This means that the borrower has the opportunity to buy back his debts and his various credits conso, including them in his application for mortgage. The home will be able to manage its monthly budget more easily, thanks to the setting up of a single monthly payment adapted to its capacities of refund. This option also aims to counteract a high household debt ratio which can sometimes be a brake on a purchase project.
The different possibilities
Financial institutions that lend money to households for credit are very vigilant about the debt ratio. As soon as this exceeds a certain percentage (33% is the average that has been set in general by the lending institutions), the file may be refused. The housing project of the household can then fall into the water and this is where the purchase of credits takes place, because the operation allows them to make a mortgage while incorporating some or all of their debts. .
It is in this sense that the principle of making a mortgage loan by adding the repayment of consumer credit is identical to the purchase of loans including additional cash , because it can then very well be used for the acquisition of a house or an apartment. The goal of the operation, however, is to end up with a single global debt, that is to say a single monthly payment of credit perfectly formatted to income but also to household expenses. It will have the help of specialists, real analysts surveyed, who will exactly know how to make the application eligible and overcome the completion of the project.
The future borrower will have the opportunity to turn to online simulation tools, specifically looking for a buy back of credits with a new project. These simulations are always free and without commitment, and make it possible to get a fairly precise idea of the amount of the future monthly payment for this type of operation. Conventional financial institutions such as banks are often more reluctant to this category of transactions, so it is better to go to a credit buy-out organization from the start. They will be able to offer unique credit deals, including one side a consumer credit (purchase of a car, construction works, purchase of a consumer good, etc.) and the other side a home loan . The lending agency will thus gather in one single loan the credit or loans and housing loan. By extending the repayment period of the loan, the amount of monthly installments can be reduced, a principle that is valid for all credit redemptions in general.
Another option available to the applicant is to apply for a classic home loan once the purchase of consumer credit has been made. This operation has allowed the borrower to significantly reduce its debt ratio, thanks to the significant decline in its monthly payment, he can again consider applying for a mortgage through the financial comfort found. However, these will be two distinct operations, for which two files will have to be submitted. In addition, it will be necessary for the borrower to have the necessary repayment capacity so that his income allows him to pay the two credits. The amount allocated for the mortgage loan may be limited by the fact that there is already a monthly repayment deadline for credits payable.
The advantages and disadvantages of such an operation
The primary purpose of a credit redemption is to centralize the financing of several projects in one institution. This facilitates the management of the finances of the home and allows to see clearly each month: a single monthly credit and a single interlocutor. On the other hand, the main objective of such an operation is to be able to adjust the amount of the monthly payment to the needs and especially to the capacity of repayment of the borrower. In the case of a home loan including one or more consumer loans, it will be necessary to study what is the maximum amount that can be obtained to finance the property.
Consumer loans and mortgages do not have the same interest rates. The latter benefit from more advantageous rates, that is to say lower. By realizing the inclusion of consumer credit in the mortgage application, the borrower can take advantage of a negotiated rate for all borrowed money. Thus, it can reduce the total cost of the overall credit subscribed. However, one must be careful about a very important parameter. In order for the transaction to be considered as a grouping of loans belonging to the real estate category, and therefore to take advantage of the conditions as such, all real estate outstanding must represent at least 60% of the total capital . This means that the house, the apartment, the land but also the development work, construction, expansion must include a greater amount than the share allocated to other purchases of consumer goods.
If a credit buyback operation has many advantages over the management of personal finances and the terms of a loan but also the financial comfort it brings, it also has its inconvenience. The borrower will have a financial contribution to provide and a commitment to respect, that is to say that he will of course have to repay his debt . The most important disadvantage is the payment of various fees due to the operation. These consist of charges for early repayment of credits to be repurchased (ARI), fees and money order and finally guarantee fees when there is a mortgage of a property (notary fees, fees bond).
Another disadvantage of real estate loans with a purchase of consumer credit is the increase in the total cost of credit . The financial package that will be put in place often lengthens the repayment period, which will increase the total amount to be repaid. A lower monthly payment is also synonymous with increased fees.
Finally, the aggregate loan with mortgage is subject to a feasibility study. Financial institutions and banks are more or less strict and each have their own rules and criteria. While some are more flexible, others have harsher conditions regarding their admissibility standards. The borrower is not assured of obtaining financing if his situation does not meet the required conditions.
As with any other form of credit pooling, the mode of operation does not differ. We must first apply, preferably online, because as already mentioned above, banks do not like this kind of banking transactions. Many sites offer to fill out a form to obtain, within 24h, a response accompanied by a feasibility notice. The request is meticulously studied by a committee of experts, who will then provide several solutions for the redemption of credits to the applicant. It will of course be necessary to quickly provide all the required supporting documents to constitute a real file, as solid as possible.