Transferability of the loan.

The transferability of the loan allows you to renew the conditions of your current loan on a new property! If these initial conditions are excellent, why deprive yourself of them!

The portability of the loan is an element to take into account in your loan contract

The portability of the loan is an element to take into account in your loan contract

Any excess financing necessary to purchase this second property will be borrowed at prevailing market conditions on the day of your new acquisition.

But if the rates increased between the acquisition of your first property and the acquisition of the second, you will benefit from a very nice advantage, provided that you have negotiated the transferability with your bank, which is not a small matter!

The icing on the cake: the portability of the loan allows the borrower to have no prepayment penalty fees. Only the processing costs related to the transfer will be due.

An interesting option if rates go up

An interesting option if rates go up

The transferability of the loan is a practice that can very quickly be advantageous for the borrower, particularly in the context of a sharp rise in rates.

If the owner wants to sell his property to acquire a new one, it is important to compare the two options available to him, namely: settle his initial loan and take out a new loan or use loan transferability.

Important: the banks do not systematically offer the option of transferability of the loan, and some will never accept the addition of this clause. So remember to ask your banker if adding this option is possible. On the other hand, even if this option is well written on your contract, it is without guarantee of acceptance by the bank.

Concrete example and implementation

Concrete example and implementation

To better understand the transferability of the loan, we offer a concrete example below:

A couple buys a property worth $ 300,000 and borrow $ 200,000 for it over a period of 25 years. The borrowing rate is then 2%. 10 years later, they decide to buy a new property for a value of $ 500,000 and therefore need a new loan of $ 400,000 for this.

During this period, interest rates rose to 7%. They then have to repay on the initial loan, $ 100,000 (remember that the interest rate here is always 2%).

Instead of asking the bank for a loan of $ 400,000 at 7% interest rate, this couple has the possibility (under guarantee of acceptance from their bank) of keeping their loan of $ 100,000 at 2% and take out an additional loan of $ 300,000 at 7%.

Instead of borrowing the entire desired loan at 7% (400,000 to 7%), this couple managed to reduce their average borrowing rate thanks to the portability of the loan.

TO REMEMBER !

  1. Don’t forget to ask your banker for this clause
  2. This clause can be useful in the event of a rate increase
  3. Transferability can save you moneyI apply for my loan in 2 minutes

 

The associated bridge loan: how is it different from other bridge loans?

The bridge loan is an effective solution to fill a cash shortage. Generally, a dry bridge loan is more expensive than an associated bridge loan.

On the other hand, whatever the bridging loan chosen, it remains attractive if the sale of the property takes place after a maximum of one year, otherwise its cost price is very high.

The associated bridge loan allows you to buy new real estate before selling your own

Explanation and definitions of the associated bridge loan

Explanation and definitions of the associated bridge loan

This bridge loan, as its name suggests, is generally associated with conventional credit. That is, the sale of the borrower’s current property does not allow him to finance his new property in full. He must therefore take out additional credit.

For the banks, it is a question of proposing to the buyer a financing plan composed of the following two elements:

  • A bridge loan
  • Long-term credit

This is what we commonly call a bridge loan associated with a long term loan (or bridge loan backed by a long term loan). More concretely, the bank advances you 60 to 80% of the total amount of the sale of your current property, which must be reimbursed within 12 months maximum.

This advance can be renewed a second time for the same duration. Consequently, the buyer has more time to sell his property, between one and two years.

As long as the sale of the current asset is not carried out, the purchaser must repay the monthly payments of the long term loan and the interests of the bridge loan, the latter being a loan in fine. Once the property has been sold, the bridge loan is then fully reimbursed by the amount received from the sale of the property and the purchaser will only reimburse the monthly payments associated with the long-term loan.

Application of the bridge loan via an example

Application of the bridge loan via an example

In order to fully understand the associated bridge loan, please read the example below. You have real estate with an estimated value of $ 200,000. The new property you want to buy is $ 300,000.

Your bank will grant you a bridge loan of around $ 140,000, which is equivalent to an advance of 70% of the value of your current property. You take out a mortgage for the entire purchase price of your new property, namely a loan of $ 300,000. This loan of $ 300,000 includes the $ 140,000 of bridge loan and therefore $ 160,000 of long-term loan.

You have up to two years to sell your property. Until then, you will have to repay the interest on the bridge loan and the monthly payments on your new loan.

Once your current property sold for $ 200,000, you will then recover $ 60,000 and reimburse directly to your bank, all of your bridging loan, ie $ 140,000.

You have several choices to use this $ 60,000: you can keep it (for work or other) or integrate it into your new credit in order to reduce the duration of it or lower the amount of your monthly installments.

TO REMEMBER !

  1. The associated bridge loan will finance part of your property until your current property is sold
  2. With the associated bridge loan you have up to 2 years maximum to sell your current property
  3. Call on Lite Lender, mortgage loan expert, to explain the implementation of the bridge loan

How to calculate your debt ratio?

The calculation of your debt ratio is decisive in the decision-making of a bank. It is this rate that will determine whether or not the bank agrees to finance a mortgage. If accepted by the bank, this rate will also define the rate of credit that will be allocated to you. Different elements will weigh in the balance to determine your debt ratio.

How to calculate your total income, step by step

How to calculate your total income, step by step

First of all, you must have your pay slips and look at the net wages or the average of the declared wages.

Please note, the calculation of these salaries will differ depending on your situation if you are:

  • an employee ;
  • a business manager;
  • in liberal profession
  • an intermittent of the spectacle

For the status of an employee, it will then be a question of calculating the monthly net income which is equivalent to the taxable net cumulation divided by 12 (the number of months annually), visible on the pay slip of December of N-1 and on the income declared on the last tax notice (therefore the pay slip of at least December last year).

If, for example, you are a salesperson and your salary includes a significant and non-negligible part of the variable to allow you to borrow a sufficient and substantial sum, then you must average the last three years of the income declared on the tax notices..

So this way, your additional income from your fixed part can still count for your future purchase.
If the borrower has not yet received a variable salary, it cannot be taken into account.

The resulting formula

The resulting formula

It then only remains to apply the formula below and you will get a first estimate of your debt ratio:

+ Support payments received
– Paid alimony
+ Weighted property income

TO REMEMBER !

  1. The method of calculating your income for the debt ratio will vary according to your profession
  2. The debt ratio must not exceed 33%
  3. The debt ratio is the main indicator on your real estate project

 

Mortgage loans – Available for your home loan.

One mortgage, one monthly payment for your home and all your credits by combining all your credits with your mortgage.

You are a homeowner, you have a mortgage and other loans or financings that are heavy on your budget, and you want to reduce your monthly payments.

Refinance your home through mortgage loan

Refinance your home through mortgage loan

With a mortgage loan repurchase, it is possible to refinance your home loan and your other loans, financings, store cards, openings of credits. You can even add a sum to cover work and your liquidity needs, without supporting documents up to 10% of the total amount of the new credit. This operation requires a notarial act. All the costs linked to the recovery of your credits are incorporated into the new credit: you must not disburse anything except for the control expertise, which is carried out only if the credit is accepted.

The maximum amount that can be granted to you is in principle a maximum of 100% of the value of the building (s) put up as collateral, estimated by an expert approved by the credit company.

It is also possible to take back only your other credits and your liquidity needs in the form of a long-term credit with mortgage, without the repossession of your home loan and over a period of 20 years maximum. In this case, the credit is made in the form of a mortgage loan for movable purpose, up to a maximum of 85% of the forced sale value of the property given as collateral (most often), minus the amount of the existing housing loan.

Your advantages

  • You can reschedule all your credits over the duration you choose, from 10 to 30 years
  • You only have one credit and one monthly payment
  • You can still have cash to cover your cash flow needs, without justifications
  • You can add an additional amount for work (carried out by company)
  • You benefit from a favorable rate
  • Your mortgage loan remains tax deductible for the real estate part

No need to travel to compare the offers of mortgage credit redemption. By submitting your request online on Cream bank, you benefit from priority and ultra-fast processing. You should only travel if your file is accepted.

We can receive you confidentially and outside bank opening hours.

How and when to change home loan insurance?

How to change home loan insurance?

How to change home loan insurance?

Once the new insurer has been chosen, the borrower must present his new estimate along with the general conditions to his bank , in order to obtain his agreement. If accepted by the bank, it will only have to sign a release certificate, thereby terminating the current contract.

Changing home loan insurance has now become possible

Be careful to manage your timing well so as not to find yourself without insurance between the end of your contract and the coverage of your new insurer. We recommend that you allow approximately 3 months to perform all of these operations , especially if your file is complex (health problems requiring additional medical exams, for example). In fact, if your profile presents a particular risk such as health problems, profession or the practice of a high risk sport, the study of your file can be longer.

When to change home loan insurance?

When to change home loan insurance?

Anticipate at best! Once you have decided to change insurance, contact your bank to inform them of your intentions and ask them for all the documents of your current insurance contract (standardized information sheet and general conditions).

In summary: Since 2010, there has been real freedom to choose mortgage loan insurance for borrowers . The insurance offered by the bank granting you the credit may not be the most advantageous for you. It is therefore essential to find out about the different types of insurance that exist on the market, compare them and choose the one that suits you best.

Do not hesitate to change your insurance during the loan and to inform your bank. Obviously, the latter must give its consent, but cannot refuse this request if the guarantees offered by the other insurance are either equivalent or superior .

TO REMEMBER !

  1. Possibility to choose your home loan insurance
  2. Best manage the change of insurance so as not to find yourself without insurance
  3. Changing Your Insurance Can Save You Money

The deferred partial loan

This is the same principle as the total loan deferral except that in addition to the reimbursement of costs related to loan insurance, interest. Consequently, the capital remaining due is not modified at the end of this deferral. We are no longer talking about negative depreciation.

The essntial loan

The essntial loan

Although the deferral of partial loan can be extremely practical or even essential in certain financial arrangements (during a bridging loan or acquisition in VEFA for example), the cost of such an arrangement is not negligible.

In the case of total deferral, you are required to pay interest on interest. It is therefore the most flexible solution, but also the most expensive. In the case of a partial deferral, the cost is characterized by the amount of interim interest. Lite Lender, real estate loan and loan insurance broker in Paris, can advise you in order to define the most effective solution for your project.

Before making the choice of a deferred loan, appreciate the cost of such an arrangement.

How do you know if you really need a deferred partial loan?

How do you know if you really need a deferred partial loan?

By contacting this brokerage firm in Paris, in addition to quality service, you will get the best financing offer on the market. Your financial advisor will take care of your file from start to finish and will be able to reassure you throughout this process.

To do this, your Firm undertakes to put all of the French partner banks in competition and to make you benefit from its business volumes to negotiate the most competitive rate on the market with regard to your profile. Beyond the rate, the Cabinet also negotiates all the other parameters of your mortgage.

Today, all of the customers who have used the Lite Lender service have recommended their entourage! And this for the following main reasons:

  • Premises ideally located in the heart of Paris, close to many metro lines;
  • Unique experts who will stay by your side until the success of your real estate projects ;
  • Advisers who will reassure you during your moments of doubt;
  • Rigorous, efficient and rapid monitoring.

What is important is to take the time to choose your real estate broker carefully and not to embark on this process, alone, not surrounded by a professional. This will waste your time, money and energy. Everything you will need for the rest of your project!

TO REMEMBER !

  1. As part of a partial deferral, you only repay the interest and loan insurance to the bank each month
  2. The cost of a partial deferral is not negligible, remember to know it
  3. Always use a mortgage broker to lower your costs

 

 

The main questions to ask yourself before buying real estate loan.

Who has never dreamed of having their own apartment or house? The first purchase of an apartment represents an important step in a person’s life. This is why you must have all the necessary information available before buying. Through this topic, you will find all the questions that must be asked before becoming an owner.

When should you buy?

When should you buy?

You are aware that you cannot buy an apartment anytime, because prices and offers fluctuate throughout the year. There are times of the year when property prices are going down, and those are the periods that you need to target to see the deals first but also do some research on the internet. Especially if you possibly have a list of items you want to have in your future apartment.

The number of properties for sale increases sharply between March and June, therefore it is during this period that the prices of property displayed in agencies will be higher compared to the rest of the year. As a result, competition between potential buyers will be tougher. To conclude, if you want to buy a property in the period March-June, you may pay more for your property than if you buy it at another time of the year.

Is my budget sufficient for the purchase of real estate?

Is my budget sufficient for the purchase of real estate?

The question of the budget is THE question that all future buyers ask themselves. Is my intake sufficient? Will there be additional costs such as agency fees or work on the future property? What are the charges? All of this must be taken into account, but if you want to be sure that you do not forget anything and have all the necessary information, we invite you to take the time to reflect and consult those around you who have already done this so as not to regret to have become the owner of a property which will not correspond to you.