When you use a credit redemption simulator, it is rare to see the cost of the credit surrender at the same time as the future monthly payment . Indeed, it is a datum that the financial organizations indicate only in the loan offer of the credit union.
The different costs of the repurchase of credit
When redeeming real estate loans
When a client wishes to redeem his mortgage, he will have to pay prepayment penalties up to 3% of the outstanding capital (or 6 months interest) if the loan was fixed rate. For variable rate mortgages, there are no prepayment penalties. Mortgage and notary fees are also expected to apply the mortgage guarantee. It may also be less expensive security deposit than the conventional mortgage. And lastly, the bank’s file fees are added to the intermediary’s fees. This is why before buying back his mortgage, it is wise to renegotiate his mortgage with his bank to minimize costs.
When redeeming consumer credit
The credit repurchase simulations do not mention it systematically, they are the prepayment penalties for consumer credits higher than dollars 10,000, they amount to 1% of the outstanding capital. When you want to consolidate all your personal loans into one to obtain a single reduced maturity adapted to your income; you will have the file fees of the bank and the intermediary commission that will be included in the loan application. Depending on the specialized organizations, this varies from 0% to 7.4%.
For a purchase of consumer credit with a mortgage on your home, it will be called home loan repurchase, it will be necessary to add the notary fees for the establishment of the conventional mortgage.
For large credit redemptions
Because the amounts of the credits to be taken back are important and form a total important amount, one speaks about big or even very big repurchase of credit. The fees are limited to a ceiling in general. Intermediary commission is limited to New Loan but not to our colleagues, which is why we draw your attention to this. Namely also that the lowest rates for a credit redemption are applied for the high amounts because there is a mortgage guarantee and fees are capped.
To know also, you will get the best credit redemption rate in your bank for small amounts under 12, 000 dollars for example. This is why, first of all, you have to ask your bank to consolidate your loans. We only intervene if your bank refuses your request.