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What do banks evaluate to approve a mortgage loan transfer?

 

Do you want to know what are the five big questions that financial institutions ask themselves to approve a transfer of mortgage credit ? Banks have clear procedures for each of their tasks. The transfer process is no exception.

Every time I take the advice of a mortgage loan transfer, I check if my client’s business is adjusting to what banks expect from their businesses. I ask the necessary questions to know how the client is in five aspects, which, basically, the financial institution will verify to decide if it wants to establish a business relationship with a potential client. I explain to you:

How much do you owe?

How much do you owe?

The business starts with the information of how much you want to ask the bank. That depends on everything. The amount of the credit determines the rate and, of course, the borrowing capacity. It is not the same to ask for $ 1,000,000 MX pesos than $ 100,000 MX. The entities establish price ranges (rates) according to the value of the debt. And, of course, verify that the client can pay the monthly payments for that credit.

In a transfer it is normal that the value you owe the bank is requested. Thus, when they make the disbursement, you can pay all the debt and continue the business with the entity that approved the transfer.

At what rate did they lend you?

At what rate did they lend you?

The bank verifies the CAT (Total Annual Cost) with which you contracted the loan, what the bank does is: will I be able to compete with a better offer and conquer this client? The financial institution is interested in staying with your business, and knows that the only way to do it is via rate. You want savings. They know.

Whenever they make you an offer, check the CAT, which includes all costs: insurance, lien, etc.

How many months left to finish paying the credit?

How many months left to finish paying the credit?

Financial institutions are friends of the long term. They will prefer if many years remain. But they won’t exclude you if few are missing. Time is part of the financial equation. Amount, rate, time are the variables necessary to establish the value of the monthly fee.

If you are interested in other products of the bank to which you are requesting the transfer, it is time to speak. It is important that they value the customer and all their businesses.

How is your borrowing capacity?

How is your borrowing capacity?

This aspect is key. Entities will review your economic situation before approving a mortgage credit transfer. Now you know. You must submit all documents that prove your income, whether you are independent or dependent. Each bank has its list of documents. Of course, it will check the information you submit. The ideal is to show that you can pay the credit and all other normal expenses of life.

How has your financial behavior been?

How has your financial behavior been?

This question is very important. I left it for last as the famous dessert cherry. Without it, there is no emotion. As well. All financial institutions will assess whether you have been paying your mortgage credit monthly payments, including your credit card fees and other debts. If you are reported, it is preferable not to initiate the transfer request. Unfortunately, if you have had some difficulties and have not been met with the fees, the bank could refuse the business.

The ideal is to take care of credit behavior. You never know when you need to show it to do good business.

A mortgage transfer is made with the objective of improving business conditions, that is, the rate, the monthly payment and the final value of the credit. Also, you could consider changing the term, more time or less time, depending on your needs. Saving is what should be targeted.

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What is penalty interest?

If you have borrowed money, you repay this borrowed money in monthly installments. This applies to both mortgage loans and consumer loans. Examples of the latter group are the revolving credit and the personal loan. Of both the mortgage and the consumer loan, in the vast majority of cases, the monthly installment consists of a repayment and interest.

It may sound a bit strange, but you may be confronted with so-called penalty interest on the personal loan and the mortgage loan. The reason why you pay penalty interest lies in the fact that the lender misses interest income with extra or early repayment.

The personal loan

The personal loan

We take the personal loan first. This is the loan form without surprises. The interest is fixed and you repay the loan in a number of fixed monthly installments. The penalty interest comes into play if you want to pay off the personal loan more quickly or you want to repay it extra.

With regard to penalty interest, there is a European directive that reads as follows:
You pay 0.5% of the amount that you pay off prematurely, if the loan runs for a maximum of one year.
You pay 1% of the amount that you pay off early, if the loan is still running for at least a year.

European guide line

Most lenders follow this European directive. However, there are also lenders who do not charge penalty interest for early repayment of a personal loan.

The mortgage

You can also incur penalty interest when you make early or extra repayments on your mortgage. It is of course very unfortunate if you have to pay for this. Always ask your mortgage provider how much you can pay each year without penalty. Most mortgage lenders apply the guideline of 10 or 20 percent of the mortgage debt.

You may also be faced with penalty interest on your mortgage if you want to transfer it to another party. Whether, and if so, how much you must pay in penalty interest depends on the remaining term of your mortgage. Of course, the shorter the term, the lower the penalty interest. In a single case, the penalty interest is tax deductible. This is only the case if you are faced with penalty interest in connection with the purchase of a new home.

What is penalty interest

Penalty interest is really nothing else than a compensation that you have to pay to your lender for the fact that this interest goes wrong because you pay off the credit there earlier than agreed, so it is a compensation. The penalty interest can occur with all loans and it is therefore important that you take this into account when taking out a loan. Even a credit with a mail order company may have included a clause so that when you pay off the amount due in one go, additional costs will be charged.

Penalty interest when buying a car

When purchasing a car, however, something remarkable occurs. The prices of cars that you see on television are generally prices based on the fact that you take out financing with this car with the same company. In other words, if you have savings and you pay the car in cash, then it can happen that you have to pay a higher amount, actually a penalty interest without ever having taken out a credit for that purpose.

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Who Do People Take Consumer Credits?

Consumer credit is one of the most demanded types of credit to fulfill a variety of wishes, because unlike a car loan or a mortgage loan with consumer credit you can get money in your account and do whatever you want with that money. Of course, if you already know what you have done, you can tell the bank or the non-bank creditor, because then you have a chance to get a lower interest rate, but you don’t have to do it and so the consumer loan is so tempting because you can spend as much as you want. If you like to sit at home and do nothing on the TV screen, then taking a consumer credit and unpaid leave for 3 months you can relax it well.

But if you like to travel then consumer credit will suit you both to buy tickets and to live at your destination. The money you receive in consumer credit gives you the freedom to do whatever you want, and the name of the loan already has the word “consumption”, which then also means the consumer or you and the fact that you can spend it as you wish. People spend on consumer credit on a wide variety of things and definitely can’t even list them all because I can’t imagine all the ways to spend that money because, for example, how do I know where a beekeeper would put such money or where the pilot spend it. I can only give you an insight into where people spend that money and then you may also have ideas on how you could spend money borrowing it . But, this does not mean that everyone suddenly has to go and take loans to get extra money, and people usually know where to spend before they get the credit, so this is just for information purposes.

Applying Consumer Loans:

Buying a car

Buying a car

One of the most used options is to use a consumer credit to buy a car, because car loans are often only granted for a certain amount, and then Casco is immediately needed. That’s why people prefer to take a consumer credit and then buy a car and not get it insured with Casco because the old car doesn’t need it. If you borrow 1-4 thousand, then you will not get anything less than 10 years for this money and no car loan issuer will want to lend to such a machine, because they usually earn only large sums of thousands and tens of thousands.

Journey

Journey is also a very popular use of consumer credit, because people often choose to travel to different exotic places and it costs quite a bit, so it is also necessary to take credit. With consumer credit, you can either buy tickets for a destination or just pay for a hotel rental. All the expenses related to travel can be covered by this credit, and so is its magic.

Repairs

Cars, apartments, or other repairs are usually considered as unexpected expenses and when they happen, you have to borrow money to cover them. With consumer credit you can also pay for both the service and the repairman and don’t have to worry about getting the money!

Household appliances and furniture purchases

People often buy household appliances and furniture better with consumer credit rather than leasing, as consumer credit has a lower interest rate and is usually more prestigious, but leasing time has already passed. Furniture and appliances can be bought when they break up for simply outdated techniques or furniture replacement, it is a consumer’s free choice. Entertainment – And although I do not support entertainment on credit, people sometimes also choose to have fun with credit than to save money and then knock down. This is how good parties are arranged and it is said to be ” put on the fires ” and then the money is gradually repaid.

Consumer credit is a good way to get money for any spending, but it must also be careful, because you have to remember that money you have to give back!