Is repaying a mortgage early feasible? And what are the steps to follow in order to carry out this action? Here's everything you need to know about early repayment.
For the majority of buyers, the real estate loan remains the only option to accomplish a real estate project. As for the maturity date, it is often estimated between 10 to 25 years. However, it is possible that some borrowers have the budget necessary, before this deadline does not come to an end. This can be explained by the resale of their possession, an inheritance or the redemption of their credit.
So, these people want repay their loan, in a way anticipated, in order to detach of this commitment, as quickly as possible.
But is it possible to make a premature repayment of a real estate loan ? And what are the steps to follow to carry out this action? Here's everything you need to know about early repayment.
Is it possible to make a prepayment ? According to the Consumer Code, the borrower can, at any time, repay his loan, partially or completely, before the due date. However, you must refer to the contract of loan, because it is possible that the latter will not authorize a reimbursement of less than 10% of the amount lent, or up to this 10%.
However, if the amount matches the balance owed, then there should be an exception.
The steps to follow to make an early repayment of a property loan
In order to carry out the prepayment, first we must, contact with the credit in order to inform him of your initiative. In this type of situation, it is preferable to make a request by writing. For his part, the creditor will detail the amount due for early repayment. For information, this estimate is completely free if the contract of ready was signed after July 2016.
Penalties incurred when repaying a property loan before the term
Generally, the refund anticipated accompanies of a penalty, unless the contract of ready does not mention any of them. These penalties are, however, regulated by the Consumer Code, and they are subject to a cap. In the case of a ready has fixed rate and to floating rate, the penalties must not exceed: – The equivalent of 6 months of interest on the remaining amount to be repaid. – 3% of the capital due before premature repayment. However, it is possible to notice an increase in compensating interest. For information, the acquittal of these penalties maybe canceled, in the event that the borrower, or his spouse, dies. These penalties can also be avoided if the borrower suffers a cessation of professional activity.
