Totally Frenched Out

From the blogger formerly known as Samdebretagne

Sunday, April 16, 2017

Faire racheter son pret immobilier, part 2

So assuming you answered yes to all of yesterday's questions, and you've done your simulation online to make sure the gains are there, it's time to think about how much this is going to cost you.

Depending on how much money you still owe, you will have at least a couple thousand euros in frais de dossier for this process - both to your old bank and your new bank, for the early reimbursement penalty, and for the new caution bancaire.  The bank won't tell you this, but if you've got the money saved up, you can pay these expenses out of pocket instead of having them included in your new mortgage. You will need to specify this when you apply however, because otherwise the bank will automatically include it so they get that extra interest.

This is also a good time to look at your mortgage insurance, and to see if there are opportunities for savings there, or if you want to change your percentage of coverage.  Initially C & I were both at 50%, but he wanted to go up to 75% this time due to reduced income and some of the crazy places I travel to.  Don't forget that you are not obligated to chose the bank's insurance, you can also go with a third party for oftentimes much cheaper.

Lastly, you need to decide if you want to keep paying the same amount (or more) and shorten the length of your mortgage, or if you want to keep the same duration and lessen your monthly payments.  Keep in mind though that most banks will still want you to stay around a monthly payment of 30% max of your total revenue.

After that, it was only a matter of choosing which banks we wanted to contact.  The application file was fairly easy to prepare - it mainly contains everything you had to provide when you applied for your initial mortgage, plus some more recent fiches de paie and avis d'imposition, so it just takes time to make all those photocopies plus a lot of ink.

During your meetings, you can also ask about negotiating their frais de dossier (most of ours put it initially at 1000€ and dropped it down to 500€ when we asked about it), and to see if you can negotiate any discounts on your monthly banking fees, assuming you will be required to move all of your accounts to their bank.

Once you've had all of your meetings with the various banks, it will take them around 2 weeks to get back to you.  If they decide to extend an offer, you will have to wait a minimum of 10 days (and a maximum of 30 days) after receiving it before signing and returning (similar to when you signed your original mortgage).

And that's about it in a nutshell.  Hopefully this has been helpful - and really a lot of this information applies as well if you are currently house-hunting.  So even though it's time-consuming, it's definitely worth it - this process will have allowed us to save nearly 30,000€ total!

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Blogger Bee Ean said...

Thanks for this information.
We got a bank calling us for this and after one appointment, we looked at the offer and it didn't decrease the installement nor the duration. We were confused. For me if nothing has decreased (duration or installement), then it was not a good deal. So we didn't pursue.

April 18, 2017 at 2:27 PM  

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