Many households have opted for the purchase in old or construction, a mode of acquisition which very often requires to carry out renovation or development work. Simply, when visiting the property, we do not always think of all the work that must be financed, especially when the repayment capacity does not allow to include an amount of extension work, so we must operate with current finances to get his mortgage.
However, a change in a situation such as an increase in income, the end of a consumer loan, or even a fall in rates can give a glimpse of the possibility of financing the work necessary for the owners. The drop in rates can notably allow renegotiation of the mortgage loan contract, this consists of asking the bank which granted the loan to review the rate downwards in order to save on interest. If this request requires re-calculating all the monthly payments, it may be appropriate to add an amount of work. The renegotiation as such does not add the amount of work, it is, however, possible to do it with the repurchase of a mortgage.
Doing work and renegotiating your home loan
The bank needs to buy back the home loan to be able to include work, that is to say, that the amount of the loan is no longer the same, it is necessary to start over on a new credit contract. This can be done within the same bank or within a competing bank, the interest is to direct its request towards the financial institution offering the best rates and in particular the best financing proposal. Concretely, the remaining amount to be reimbursed from the mortgage is bought by a bank and the latter will add the amount of the work to be financed, this allows to start again on a total amount including the acquisition and the works.
To validate this type of financing, it is necessary to file a request for the repurchase of a mortgage by specifying the amount of the loan in progress, as well as the need to carry out work. It can be any type of work:
- Structural work: foundations, raising of walls, sanitation, earthworks, drainage
- Renovation: facade, paintings, roofing, floors, tiles, electricity
- Furnishing: kitchen, exteriors, gardens, heating
- Extension: swimming pool, veranda, terrace, landscaping
- Energy saving works: windows, roof insulation, heat pump, home automation
Get an estimate for the renegotiation of the real estate loan and the works
Before embarking on a renegotiation project for the financing of works, it is advisable to make a request for the repurchase of mortgage, taking care to specify the new need concerning the works. This makes it possible to obtain financing proposals with the current rates, the borrower can thus quickly know if the operation is feasible but also to be aware of the repayment conditions offered.