Real estate investing is a safe bet. In fact, investing in stone is a great savings solution. This investment helps to secure its future. If you are having some financial difficulties, you can claim a mortgage purchase for real estate. What are the causes of debt? How does this financial operation work? Who can apply?
What are the main causes of debt?
Contrary to popular belief, the causes of indebtedness are not mainly due to over-consumption of loans. Since the entry into force of the laws governing consumer credit, consumers can no longer borrow if the over-indebtedness ratio is greater than or equal to 33%.
For your information, we remind you that the ratio is calculated by comparing the income and expenses of a household. If over-consumption of credits is not the main cause, what can push consumers to apply for credit redemption?
The change in lifestyle of the French as accidents of life are the factors that encourage consumers to restructure their budget. For example, in the event of divorce, it is necessary to separate the real estate between the ex-spouses. When a person is in a redundancy position, they will face new financial difficulties because of the decline in income.
What are the different types of redemptions for real estate loans?
Decrease the amount of monthly loan repayments to stabilize the household’s financial balance; here is the purpose of the mortgage repurchase. There are two types of financial products:
- The restructuring of real estate loans. In this case, the organization only takes over real estate loans in progress.
- The full repurchase of real estate loans and consumer loans (also called mixed loan redemption). Here, the financial institution proposes to make the full recovery of all your current credits including unpaid and bank overdrafts. Beware, however, 0% loans and 1% housing loans are not part of mixed buybacks.
We would like to alert you to the duration of the credit. The duration of the credit varies on average between 5 years and 30 years. To decrease the monthly payments, it is necessary to extend the duration. However, this lengthening also generates a much higher total cost of credit. Before signing the loan offer, compare and always check the final amount of the loan. A loan commits you, so you must bet on caution.
Who is the mortgage repurchase aimed at?
The purchase of real estate loans is only for people who own property ( officials, retirees, skilled workers or not… ). It can be an apartment, a second home, a villa, a garage or a company.
Other consumers may only have access under certain conditions to the purchase of consumer credit. And for good reason, the owner using a financial institution to renegotiate his mortgage can put his property (or one of his property) in mortgages. To propose the mortgage of his good solidifies the file of request. This guarantee will be of great help in reassessing the amount of the credit, greatly lengthen the duration of the loan and readjust the monthly payments since the mortgage serves as a guarantee.
In addition, you should know that age is a decisive criterion in obtaining this type of credit.
To clarify this article, it should be noted that people who have filed cases in debt distress commission with the Bank of France as well as people banned bank are not entitled to this assistance.