Suppose you bought an apartment for investment. You are paying quietly. Then, with a special bonus, you bought a house. You pay the fee with the rental income and it has been valued well in the last two years. You have very few savings. And interesting things have been going on in your life.
Someone special arrived and they are thinking about moving in together; and, some friends – very good businessmen – are offering you to enter a venture. You need money and you have it invested in real estate.
What would you do?
To sell? You think it is not the time. The house will be valued more. The apartment is perfect for living with your partner.
How about selling one or two of your new partners a stake in the house? And, would your partner be interested in continuing to pay 50% of the debt of the department?
You need to make changes to your mortgage loans to free up resources.
Step one: check the interest rate
Before asking them, check your credit rate. It could be that you find a lower rate in the market and, therefore, the monthly fee would go down. In that case, you could request a transfer of your credit to another bank.
This financial operation is called “ mortgage debt purchase ”. It consists of selling the debt you have with a bank to another financial institution that, for a lot of possible variables, is offering a better rate. I give you these examples:
- The market is offering lower rates than when you took the credit years ago.
- The entity is competing strongly and wants to attract more clients with mortgage loans.
- Your customer profile has improved over the course of this time.
Three are better than one
As in other businesses, having partners in a property that is being paid with mortgage credit is a good opportunity. Financial institutions have several products for family groups, couples – not necessarily with current marital partnership – or groups of people to buy real estate with mortgage loans . The normal is up to three people per credit. The bank assesses that the group will be able to pay the credit and be able to continue paying for studies, public services, the market, transportation, clothing, etc.
By inviting your partners to be part of the home business, you will have these advantages:
- The evaluation of the income will be better: your income and that of your partners will be greater, therefore, they will mean a better payment guarantee for the bank.
- The responsibility of the credit will be shared: the fee will be paid among all and will have a single payment schedule.
- The expenses are all: taxes, legal expenses, insurance and maintenance are equal.
The transfer will involve some new features:
- The financial institution will ask you for joint life insurance , that is, it will no longer be individual; All will be covered in their respective percentage as owners.
- Also, they will have to pay all risk insurance to protect the property.
- Each partner will have to sign the deed with the new mortgage in favor of the new bank.
This case is different. Whether you marry or not, you know, the apartment could become part of the commons of the couple. Therefore, it does not have to “sell” a share to your partner. If you get married, the good could automatically enter the marital society; If they live together for more than two years, the union will be considered as a matter of fact and will have the benefits of a society of marital property.
But it does make sense to transfer the loan to another bank to get a better rate and take the opportunity to make the request between the two.
The effects are equal to the previous example: Two people, in most cases, add more income than one. The expenses will depend on the two, after all, they are making life together. But there is a difference: the writing will be in the name of both. That is, in order to negotiate it in the future, it will require the signature of both.
If you are thinking of requesting a purchase of your mortgage loan from another bank , this is the time to make decisions.