WHY AND WHEN TO INITIATE A CREDIT RENEGOTIATION




WHY AND WHEN TO INITIATE A CREDIT RENEGOTIATION
Credit renegotiation is a financial process designed to create both greater flexibility and / or savings for the borrower. However, in order to be able to envisage such an operation, it is necessary to respect certain conditions and to strictly observe the preliminary steps to any request.

WHY WANT TO RENEW YOUR REAL ESTATE CREDIT?
Today, the context is favorable to the revision of your mortgage, even when it is only 2 or 3 years! Indeed, interest rates are still extremely low!

In December 2018, a good record can obtain rates of 1.40% over 15 years, 1.60% over 20 years and 1.80% over 25 years. Note that an excellent record can still lower these percentages, to obtain respectively 1.05%, 1.17% and 1.25%!

WHEN TO INITIATE THIS APPROACH?
But beyond the reasons that can motivate a renegotiation of credit, it is imperative to satisfy three conditions, under penalty of being denied the application:

The remaining capital must be more than 70 000 €
The request must be made, ideally, during the first third of the remaining term of the loan, or even at the very beginning of the second
The difference between the mortgage rate and the rates traditionally applied at the time of the application must be at least 0.7 points, ideally between 1 and 2 points.
THE 3 STEPS PRIOR TO A CREDIT RENEGOTIATION
If the above conditions are - a priori - observed, the borrower can continue his approach by following these steps scrupulously:

Know the remaining cost of the mortgage
To do this, all you have to do is take out your mortgage offer and refer to the definitive depreciation schedule in the appendix. Even though presentations may be different from one organization to another, the borrower can quickly know the amount of principal outstanding, as well as the weight of interest and insurance on his monthly payment, on the date he wish.

Get a loan simulation from the bank
Once this amount has been determined, the borrower can request a loan simulation from his bank for a home loan at the level of this outstanding capital. Be careful, the document obtained must not only offer more favorable terms than the debtor's current contract, but also propose a difference of 0.70 or 1 point in order to continue the process.

Work your argument
Before asking for an appointment, a renegotiation of credit is prepared thoroughly. Already, it is necessary to determine what are the objectives pursued: improve its purchasing power or repay faster.

Once this essential point is cleared up, it is a question of treating one's file: guaranteed to treat with a good payer, the incomes are domiciled in the bank, the borrower disposes of solid financial investments and savings ...

Finally, the borrower must bring bids from the competition to indicate to his banker that he knows what he can obtain in another establishment.
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