Takeover of mortgage credit and repurchase of mortgage… At first glance, it is a single operation and yet, they are 2 different financing solutions. The Credit Guide explains the differences.
The credit redemption, Medafo?
To start, a definition: what is the credit redemption? This operation allows to group all or part of the credits and debts to pay only one monthly payment.
Say you have to pay back several monthly payments (mortgage loans, consumer loans, tax delays, bank overdrafts). At the same time, you want to buy a new property but your debt exceeds the 33% ceiling set by the bank.
With the repurchase of credit (also called loan consolidation and debt restructuring), you group all your monthly payments into one loan and over a longer period. Result, your debt ratio decreases, you find an investment capacity and… can launch your real estate project.
The repurchase of mortgage credit and repurchase of consumer credits
There are two types of repurchase of credit:
the purchase of consumer credit : only consumer loans are grouped together;
- Mortgage Loan Repurchase: Includes a mortgage and 1 or more consumer loans. The operation is secured by a mortgage.
The repurchase of mortgage
Real estate renegotiation is a different operation. We are rather in the “register” of the mortgage. In concrete terms, it is a question of revising the terms of a mortgage so that the borrower can benefit from new, more advantageous financial conditions (like the lowering of the interest rate).
For example, borrowers who bought in 2011 – that is, at a time when real estate rates were particularly high – are now hurt by historically low interest rates. With credit renegotiation, borrowers can “renegotiate” their real estate rates down.
Note the distinction between renegotiation of mortgage and real estate loan redemption. In the first, the borrower reviews the financial terms of his loan with his bank. In the second, the operation is carried out with another establishment.