Renegotiating a mortgage allows you to take advantage of cheaper rates and therefore to save on interest, it is possible to renegotiate several times his home loan but under certain conditions.
Renegotiate a mortgage
The renegotiation of mortgage is simply the possibility for the borrower to contact his financial advisor to ask him to readjust the terms of repayment of his loan. This usually involves renegotiating the credit rate following a decline in interest rates on the real estate market. The renegotiation takes the form of an endorsement signed between the two parties and which makes it possible to readjust the terms of repayment: rate, duration, monthly payment, capital remaining due.
Banks are not obliged to respond positively to a request for loan renegotiation but this service offered to customers allows to preserve the repayment of credit within the institution and the domiciliation of the accounts, generally associated with the obtaining of the loan. initial bank loan. There are also no limits on the number of renegotiations, if the situation lends itself, one can ask to carry out a second renegotiation of credit, hoping to obtain an agreement from the lender.
The limits of real estate renegotiation
A loan can be renegotiated along the way, following a drop in rates or the need for the borrower to readjust the monthly payments but it is a transaction that requires time and can also generate costs. The bank must review the file, evaluate the feasibility of the renegotiation and then propose the new conditions to his client, which takes time. Renegotiation must also be solicited when there is a real interest for the borrower, otherwise the bank can quickly refuse to carry out a second or even a third operation.
The renegotiation of a loan remains a punctual operation and can not always lead to an agreement of the bank, in this case, it is still possible to proceed with a repurchase of mortgage, it is the same principle as for the renegotiation with the exception of using a competing bank to request the purchase of the loan and obtain more favorable terms. Here too, several mortgage repurchases are possible, it is enough that there is a real interest for the borrower.
Should we better renegotiate or buy back the mortgage?
Both operations have advantages and disadvantages. As part of the renegotiation, the bank already has the domiciliation of bank accounts, it will propose renegotiation to preserve its client but will not attempt to offer the lowest rate, risk of losing interest on the bank loan. The repurchase of mortgage will be able to propose more interesting rates because coming from a competing bank but this operation entails higher expenses (prepayment, guarantee, insurance). A comparison of the two operations remains the best solution to know which offer is the most interesting, just compare the total cost of mortgage.