How to change banks with an existing loan? A question that you have certainly already asked yourself. And is it possible to change banks easily in this situation? There is a solution: buying back home loans! Explanations.
Changing banks with an existing loan: instructions for use
If you repay a mortgage, you have two options for changing a bank:
- Change banks while keeping your mortgage in your old bank. This solution involves leaving at least one account open in the bank where you repay your loan. If you continue to have your income domiciled at your lending bank, it may be that they offer you improved borrowing conditions. Indeed, it is always more secure for a bank that the income of its client is established at home.
- Change banks by having your loan redeemed by your new bank. This operation is called the repurchase of mortgage. As the credit is also transferred, it is advisable to place your income in the new bank. Indeed, this generally makes it possible to obtain better borrowing conditions. A number of banks even make it a condition for the takeover to take place.
The first solution generally allows you to take advantage of savings offers or attractive rates offered by another bank. With the second solution, you have to find a bank willing to buy your mortgage. This is particularly interesting if you want to save on your loan while changing banks.
Change of bank: with or without repurchase of mortgage?
To make your choice, two main criteria must be taken into account: the pecuniary aspect and the practical aspect. Let’s start with the financial dimension: buying a mortgage several years after taking out a loan can lead to significant savings.
This obviously depends on the evolution of rates since the signing of your loan, but not only! Your personal or professional situation may not be the same as in the first months of your credit. In this case, your borrower insurance must evolve and adapt to these changes. The repurchase of mortgage loans also allows that. Note that re-examining loan insurance needs can often reduce the total cost of borrowing.
Conversely, changing banks without redemption does not change anything financially. Sometimes it can even cost you more with the opening of a new account, booklets, insurance, etc.
On the practical side, it depends on you: some people are comfortable with having to manage accounts and contracts in several banks. It is important not to underestimate this criterion because it has a real impact on the daily management of your finances.
To change banks with a mortgage, make an optimal redemption!
The interest of a repurchase of mortgage is only real if the operation brings you a profit in the long term. To get an idea of the amount that a repurchase of your loan could save you, you have two solutions:
- Canvass banks and compare their offers. This method is often tedious and time consuming. You will need to present your situation, your project and your supporting documents to each bank consulted.
- Entrust this task to a specialized broker. Advice and negotiation are the two facets of the broker profession. Advice, to understand your expectations and support you. Negotiation, to find the most advantageous offer for your situation. The broker is a privileged intermediary when it comes to finding an optimal credit or insurance offer. Expert in the sector, he is able to negotiate effectively with banks and insurance companies.
The best deals can save thousands of dollars.
If you want to change banks with a mortgage in progress, you can now submit your free study request and without obligation. A dedicated advisor will make an initial analysis of your file and will contact you to clarify your project.