What is the mortgage payment? How to take over a loan

Do you know what the mortgage payment is? This is an operation that allows you to take over from another borrower, making your own mortgage. What does it mean? During the loan amortization period it is possible to “sell”.

The loan to a third party

mortgage money cash

Which from that moment will assume the obligation to repay the remaining installments. The takeover takes place through a contract between the person who has taken out the loan (the loan) and the one who takes over (the contractor). With this agreement, the contractor undertakes to reimburse the financing for the purchase of the property, according to the contractual arrangements established between the bank and the bank. Usually, the takeover is exercised when you buy a house from a builder , who had stipulated a building loan for the construction of the building.

When you buy a property directly from a construction company, it is likely that this will require, among the conditions of purchase, even the taking over of the mortgage. The consequence of this choice is that the new owner will have to repay the remaining part of the loan taken by the company for the construction of the building. For the bank that has disbursed the loan nothing will change, because it will continue to receive payments for repayment of the loan. Instead, the construction company will not have to continue to pay the loan, extinguishing it in a single solution before the sale. The loan will pass to the buyer, even if with limits: the capital that the collector will have to repay will not exceed 80% of the value of the property , in case of taking over a mortgage from a builder.

Why should the buyer accept this proposal?

Why should the buyer accept this proposal?

The main advantage is that with the take-over it is not necessary to open a new mortgage , with all the associated expenses, such as the preliminary investigation, the registration of the mortgage and so on. The takeover allows you to “inherit” the loan from the construction company, taking over payments. But we must be careful in accepting this option, because for example some manufacturers ask for the reimbursement of the expenses incurred at the opening of the mortgage: in that case, the economic advantages would be reduced.

On the other hand, the operation of a mortgage loan is slightly different

On the other hand, the operation of a mortgage loan is slightly different

the characteristics of the practice are quite similar, but when you take over a loan from a private seller you will have to pay all the remaining capital to be repaid, even if this amount exceeds the 80% of the property value. In any case, it is not enough to know what the loan is, but you need to find out in detail about the original conditions of the loan.

Credit scoring – history and creditworthiness, installments and capital

Credit scoring is a method of calculating the reliability of users who require a loan or a loan to purchase a property. It is therefore a tool available to banks or other active financial companies for the provision of loans. These subjects need to quantify the risks of insolvency of citizens who apply for funding. Once it was the director of the branch who was responsible for assessing the customers’ financial reliability and choosing whether to pay the amounts requested, but today, given that banking services have moved online and citizens want more clarity, ways of introducing them have been introduced. more precise calculation, just like credit scoring.

This system of calculating the creditworthiness

creditworthiness

Often based on the use of specific software, which, through an algorithm, is able to clarify the risk of insolvency based on a series of information on the applicant and the characteristics of the loan. In any case, bank staff will have the last word about the possibility of providing the loan. This method has prevailed above all in the area of ​​real estate purchases: the score for the mortgage is used precisely to determine whether the amount requested is sustainable for the borrower.

What data should be taken into account when calculating credit scoring for a mortgage?

calculating credit,cash

First of all, the credit history of the applicant is taken into account, considering for example whether in the past he was reported as a bad payer. Furthermore, some information is taken into consideration, such as the geographical area in which the property to be purchased is located and the type of house (for example if it is a first home, the calculation will be more favorable), the age of applicant and the type of employment relationship: in the latter case the type of contract is assessed (always better a permanent employment contract , with a stable pay slip) and the years of activity. It is then defined if the mortgage is directed to the purchase or renovation of the house (the first option is preferable).

Then, the most important considerations come into play, which concern the sustainability characteristics of the loan. The ratio between the loan amount and the value of the property is then calculated, but also the ratio between the single installment and the total amount of the loan. Finally, the ratio between the value of the loan and that of the annual income is counted: the lower it is, the more sustainable the loan will be, given that it will weigh less on the pockets of the applicant, who will be able to repay it more easily. In this way, credit scoring provides an element of clarity that is very useful for both banks and their customers.

Good faith for an over-indebtedness plan

In the case of over-indebtedness, individuals have the opportunity to get help. The public authorities have set up social assistance structures within the communes, such as the municipal social action centers and the social services of the regional council. These establishments are there to help you and inform you in the steps required depending on the severity of your situation.

But if despite your efforts your situation worsens, you can request a procedure of treatment of overindebtedness with the commission of overindebtedness. There is one per department, at the headquarters of the Banque de France. The admissibility of your file depends on two conditions: being really over-indebted and showing good faith.

Access to the procedure

financial

People who are in financial difficulty are given the opportunity to get help to cope with their debt. If after having tried to rebalance their budget, and without having incurred other debts, they still can not go up the slope, the recourse to an over-indebtedness procedure is the only possible solution. The filing of a file with an over-indebtedness commission is free and open to any individual who does not fall under the procedures of the Code of Commerce , such as traders, craftsmen or persons exercising a liberal profession.

According to the Banque de France, a person is considered to be really over-indebted when, despite his efforts, he can no longer pay his personal debts.

Personal debts concern all non-professional debts, ie bank debts, such as consumer loans, real estate loans and overdrafts, and current expense debts, such as arrears of rent, taxes and unpaid bills. However, debts resulting from alimony, fines, pawnshell or conviction for damages (damages) are excluded from the proceedings.

Without good faith, no rights

indebtedness

Once your request to receive an over-indebtedness treatment is accepted by the commission, you must fulfill some requirements at the risk of being no longer eligible for the over-indebtedness plan. Indeed, the commission agrees to help you find solutions to get out of your financial difficulties if you play the game by implementing on time the measures of the negotiated over-indebtedness plan. Otherwise, the right to benefit from this procedure may be withdrawn.

In good faith 

deposit

Attention: even if you are in good faith at the time of the deposit and the admissibility of your file by the commission, it is possible that you are not any more thereafter … it would have as consequence to cut all your rights! An example of proven bad faith: a couple who benefited from an over-indebtedness plan who would file a second file for a new over-indebtedness procedure, whereas they had not already respected the first plan negotiated with the commission and had ignored the letters sent by the Banque de France for several months, before proceeding to the required steps.

Therefore, if an individual does not apply the already accepted over-indebtedness plan and files a file a second time to request a new procedure, namely a reduction or removal of his debts, he is considered in bad faith and loses his right to benefit of the over-indebtedness treatment procedure.

How to manage your money without credit cards?

How to manage your money without credit cards is simply a matter of living within your means. Although it sounds simple, it can be a bit difficult when you are the first to make the change. The goal, however, is not to spend more money than you actually earn within a certain time frame. Sticking to living within your means can be achieved by making and following a budget, and then paying all your items with cash, checks, automatic bank payments and debit cards.

Budget

money budget

The first most important step is to find out how much money you put in and how much money you spend each month . Budgets can be made on the basis of payment periods, but they are easier to manage when they are created monthly since, in general, the frequency of invoices for most households is done on a monthly basis.

An adequate budget will not allocate more outgoing money than incoming money. In other words, if you earn € 3,000 per month, the household spending budget should allow no more than € 3,000 per month . The entire budget should take into account occasional payments, such as annual insurance and property taxes, Christmas gifts, birthday gifts, and emergency funds for car repairs or for home modifications.

If you currently spend more money than you earn each month, you will have to reduce or eliminate your expenses in one or more areas. It is very important to make a budget based on actual income only. Credit cards are not a form of income and should never be included as such in the household budget.

Cash and checks

Cash and checks

Living without credit cards means spending only what you really have. One of the easiest ways to force this is through the use of an old but effective technique that is known as budgeting techniques .

These budget techniques are defined as envelope systems labeled with cash in them

These budget techniques are defined as envelope systems labeled with cash in them

Label envelopes for a given budget category, for example, gasoline, food, entertainment, among others. Then add enough money to each of these to effectively pay what you owe.

If your budget allows you to give € 200 per month for gas and you get paid weekly, you can add € 50 to the corresponding envelope each week . When the time comes to buy gas, open the envelope and pay with the money that is there. Resist the temptation to grab money from envelopes since once the money has completely disappeared, you are not allowed to spend more on that budget category until a new month or until another budget period.

A similar approach can be used with checking the checkbook, but it is not always as effective. Instead of handling cash, write the budgeted amounts and categories in your check register, then write a check for each written category of the specific budget category and pay with that money.

 

Loan for residual debt relief

Anyone who wants to apply for a loan for a debt relief, will come around one or the other hurdle! An exemption from residual debts, after all, means that the debtor has a corresponding debt career behind him. The problem here is that even after the Restschuldfreireiung an entry in the private credit exists. This is interpreted by most banks negatively and is the basis, which is why a loan application is usually rejected on principle.

A chance for a new beginning

The majority of banks are hesitant to enter into talks, given the prevailing circumstances, because they consider the risk “intolerable”. Many debtors slip into the debt trap unhindered with a new loan. Nevertheless, there are conscientious people who see a chance for a fresh start in a debt relief and need a loan for this. For this group of people there are certainly ways and means to obtain a loan after a residual debt exemption.

Loan offers without examination of private credit

Consumers who want to take out a debt relief loan will soon find that a negative private credit entry can prevent this important cash injection. The only sensible option here is to resort to a loan without the requirement of a private credit query. However, in order to be able to use one of these offers, some criteria must be met: For example, the applicant must prove, among other things, a permanent position.

Anyone who can additionally prove having a residence in Germany by means of a valid ID card and in the best case can name a guarantor will have very good chances of success. To find a truly serious offer, various offers should be subjected to a strict comparison. Quotations should be made at the house bank and at the same time on the internet in order to create the largest possible basis for comparison.

Possible alternatives to the loan without private credit

Possible alternatives to the loan without private credit

Many are reluctant to choose a loan without a private credit request, as the interest rates are very high compared to other credit models. Unexpectedly, when all else fails, consumers can face their financial hardship with the help of a professional credit intermediary. This can convey loans from wealthy people to the applicants. A query of the private credit does not take place here, so that a loan in the appropriate amount should see nothing in the way.

Some agencies only ask for some information about the current employer and salary details. On the one hand, based on these economic data, the level of the interest rate is calculated and on the other hand an assessment of the liquidity is made. Private credit intermediaries, too, want to know their security and grant a loan for a debt relief only under these conditions.