The implementation of a credit redemption involves covering costs related to the implementation of this financing, here is in detail the various costs incurred by this banking operation.
The cost of a credit surrender
Buying a real estate or consumer credit purchase entails different costs, which can be either expenses related to the repayment of old debts or the setting up of the financing itself. These fees may vary from one institution to another, meaning that the presence of an intermediary may add additional costs, just like the need to go to the notary as part of a mortgage guarantee.
The cost of a repurchase of credit will therefore vary according to the type of repurchase requested by the borrower and the credit institution that will grant the financing. These fees may of course be negotiated, with the exception of ineluctable costs such as deed fees or prepayment fees. To better understand how the cost of a loan buyback works, it is necessary to detail each of these costs.
The different costs of a loan buyback
Repaying a loan in advance, that is to say not to go to the end of the contract initially planned will result in the reimbursement of compensation by the borrower. In the context of a real estate loan or a loan consolidation, the borrower will ask the organization to buy back its loans and necessarily it will be necessary to pay these expenses. The IRA can not exceed more than 3% of the capital remaining to be repaid, in other words, a real estate loan whose capital remaining to be reimbursed is 100 000 USD will result in the settlement of 3000 USD of compensation for anticipation. These costs will be borne by the body that will add this amount to the overall financing, the IRA are not systematic, some contracts do not provide IRA.
Fees and / or brokerage fees
The implementation of a loan buyback file entails costs, it can be fixed costs (example: 300 USD) or a percentage on the amount of funding. As part of a broker for example, the brokerage fees can not go beyond 7% of the amount to be financed. In other words, for a repurchase of credit of a total of 100 000 USD, the costs of the broker will amount to 7000 USD. These fees can be negotiated with the broker, the average is usually 5%.
Setting up a mortgage-backed credit redemption involves a handshake fee, ie the notary will withdraw the first mortgage and replace it with the new one, again implying an authentic deed these fees are fixed by a national scale and to this may be added fees, set freely by the notaries. Thus, these fees may vary from one office to another, they may be fixed or variable fees and they may also be negotiated with the notary.