If the commonality between the repurchase of real estate credit and the regrouping of credits is to offer to the debtor the chance to lighten his debts, the two financial techniques differ on certain points.
Credits for different objects
The rates change, sometimes they climb, sometimes they fall. However, when faced with a convenient situation where the beautiful villa next door is for sale, one seizes the opportunity by carrying out a mortgage. The rate negotiated at that time seems higher than the one currently practiced. This is where the real estate mortgage buy-in comes into play, with the objective of giving borrowers low rates, even with a current contract. Here, the loan concerns a mortgage.
A family has taken out several consumer loans ( personal loans, revolving loans, personal microcredit…). It also has other debts, which considerably increases its monthly expenses. One solution is effective in avoiding over-indebtedness and in organizing its debt management: credit consolidation. It’s simply a matter of putting all the outstanding credit files together in one file. The objective is to reduce the expenses of reimbursement of the family.
NB: there may be in the consolidated credits, a mortgage. In this case, if the share of this mortgage represents more than half of all the credits pooled, the new file will be treated according to the provisions applicable to the mortgage, so it will be a real estate loan redemption. Otherwise, the new contract will follow the usual rules for credit pooling.
What about credit redemption procedures?
The approaches to the 2 types of financial solutions are pretty much the same. They can be traded within the debtor’s bank. But sometimes the bank is reluctant and sometimes refuses to consolidate or buy back credits in progress. The debtor will have no choice but to go to another institution. It is clear that the operation becomes complex, only with the help of a loan broker, the borrower will have a small chance to find a good compromise.
It should be noted that both transactions entail fees and expenses related to this change of file, including brokerage fees. The borrower must undergo the early repayment of his credits. In the case of the repurchase of mortgage, he must consider the costs of guarantee.