Today, an individual wishing to acquire real estate is very lucky to find themselves in front of their banker to finance their housing. If the borrower already has a loan on the back, it will be difficult to take out a second one, but it is possible to transfer it.
Credit transfer: what is it?
In general, when an owner sells his property for the purpose of buying a new home, he balances the capital owed on his first home loan to take out a new one. This transaction creates a lot of costs for the debtor and the new contract will not have the same advantages as the previous one.
The credit transfer consists in becoming the owner of a new property, while keeping the advantages and pricing conditions of the current financing. This option allows the purchaser to lower bank charges, keep his interest rate and avoid penalties related to early repayment.
The bank will not take into account the situation of the real estate market at time T, this is the reason why the financial conditions will be the same as for the old loan.
Real estate credit transfer
In the case where the borrower took out a first loan whose interest rate was very low compared to those practiced during the second subscription, then it is in his interest to make a credit transfer. However, the initial contract must have included a specific clause to the transfer.
If the owner wants to take out a new loan to finance his new acquisition, but interest rates have increased due to the economic situation, then he can keep the initial rates and reduce the costs of guaranteeing the original contract required by banking organizations.
In the event that the rates were high, then it is more advantageous for the debtor to repay the entire loan and take out another to benefit from the lower rates. Currently, interest rates are at a very low level so it is more attractive for an individual to transfer their credit. However, this kind of transfer is very rare in France.