Prepare for a birth with a credit buyout

 

Are you going to welcome a newborn baby into the household but do not know how to finance the arrival of this baby? Credit consolidation is an effective alternative.

Buy back credits, prepare for baby’s arrival

Buy back credits, prepare for baby

A birth is an event filled with joys but also with worries. As informed parents or young parents, the question of financing this upcoming arrival is a source of questions, especially when the household already has credits in progress.

The grouping of credits precisely makes it possible to combine the various loans into one, which makes it possible to lengthen the duration of repayment and to reduce the amount of the monthly payments. It is also possible to add an amount dedicated to purchases planned for baby, it is optional.

Finance the birth budget

Finance the birth budget

A birth budget is calculated, that is to say that it is necessary to calculate the total of the planned expenses to be able to find a financing solution, whether savings, credit or repurchase of credit. There are therefore several types of expenses to plan for: food, hygiene and care, clothing, toys, furniture, equipment, health and others.

For food, you need between 3 and 4 cans of milk at a price of 20 $ (80 $ per month maximum). For hygiene (diapers, soap, cream), we are about 100 $ per month. Clothes, count 5 $ per bodysuit and pajamas, only about 100 $ for the first 6 months. The early learning, rattle and mobile toys will cost around 40 $. Furniture (bed, wardrobe, changing table and others), around $ 500. The equipment (baby carrier, bottle, bottle warmer, cooking, bibs, high chair, pram, stroller, playpen, car seat, etc.) around 800 $. For health (visits once a month, vaccines, illnesses), the pediatrician’s fees are at least $ 28.

Savings, credit or buy back baby credit?

Savings, credit or buy back baby credit?

In total, the birth budget for the first 6 months can reach: $ 480 + $ 600 + $ 100 + $ 40 + $ 500 + $ 800 + $ 168 = $ 2,688. If the household wants to save, they will have to put $ 298 aside each month, an amount almost impossible for the majority of people.

Credit is also a short-term solution, especially with the offers of unassigned personal loans. If the household already has loans in progress, there is no risk of accumulating yet another loan, as much to finance the project by including it in a grouping of loans. To simulate this project, it’s free and without obligation. Just complete the simulation form, the result is very fast.

Are the costs of loans more and more expensive? How it works ?

For the past two years, a historic drop in interest rates has been observed on the credit market, more specifically mortgage loans. Unheard of as some specialists would say. After a slight increase in 2017, a further drop in the gross rate is observed in 2018. What motivates people wishing to embark on a project requiring funding.

Bank interest rate: understanding how it works

Bank interest rate: understanding how it works

A loan is made up of several elements. In addition to the capital borrowed, the bank adds the interest rate and various fees including, in particular, administration fees, insurance, guarantees and prepayment penalties.

In this whole lot, it is mainly the interest rate that costs the most to a borrower. Its calculation is made on the basis of several factors: the bank’s margin, the credit manufacturing costs, the risk premium (software, employee compensation, etc.) and finally the rate of the financial markets. The latter is based on the key rate applied by the European Central Bank.

Note that in terms of credit, there are different types of interest rates

Note that in terms of credit, there are different types of interest rates

The most classic is represented by the fixed rate which, as its name suggests, remains unchanged throughout the life of the loan. It is recommended for long-term loans and is calculated on the basis of the 10-year Treasury Bond (10-year OAT). The variable rate can go up or down depending on the market.

Which makes it both beneficial and very dangerous. This is why the banks have created the revisable capped rate which is limited by a ceiling in the event of too large an increase in the market rate. Note that this rate is indexed for its part on Euribor.

Rise or fall in the interest rate?

Rise or fall in the interest rate?

In the mortgage market, rates fell sharply. The most historic drop was observed in November 2016 when they forecast 1.31% whereas a year before, they were still 2.28%. In August 2017, a small rise of 1.57% was felt. And in 2018, the crude rate plunged again to 1.48% in July.

All this to say that the rates are currently very low. Will this trend continue? Not so sure. The European Central Bank has in fact expressed its desire to end its policy of low key rates, which will necessarily increase lending rates. Borrowers should expect to pay more for their loans.

Despite this situation, they should not only bet on a low interest rate to have a cheaper loan. Let’s not forget that the cost depends not only on the interest rate, but also on the duration of the loan, the amount borrowed and the risk profile. We must therefore already think about taking good care of your file. And to easily find a loan, there are all kinds of credit simulators that you should not hesitate to use.

Can we get a mortgage with an LOA in progress?

Leasing with an option to buy is a contract assimilated to consumer credit, taking into account the rent is therefore identical to that of a car loan. Borrowing is therefore not so simple when you have a current LOA.

LOA: principle and impact on debt

money

Leasing with purchase option is a contract which makes it possible to rent a car and acquire it at the end of the rental period, a purchase option is defined at the outset and allows the motorist to become vehicle owner if desired.

Simply, the LOA is financed by consumer credit, this means that it will impact the debt capacity of the subscriber and if the latter wishes to embark on a real estate project, he will eventually encounter some difficulties in obtaining its financing.

The banker will, therefore, study the plaintiff’s situation and take into account his rent, you should know that we can go into debt up to 33% of his income, beyond that, the bank will not accept to release the funds for the mortgage applicant.

If the LOA’s rent is too high, then financing cannot be set up because the applicant’s repayment capacity will not be sufficient, which completely calls into question the real estate purchase project.

Solutions for obtaining a mortgage

cash

If your LOA does not allow you to take out a mortgage, you must then consider several solutions to end the rental contract with an option to buy:

  • Redeem vehicle / contract
  • Transfer LOA to another person

Important: it is not possible to terminate an LOA contract since it is assimilated to a consumer credit contract, therefore, it is necessary to find other solutions to disengage.

Have the vehicle / LOA contract redeemed

money

The lease with purchase option plans from the 13th month a purchase option for each month following the far end of the contract and the final option. Therefore, it is possible to purchase the vehicle from the 13th month.

Either the motorist can buy the vehicle himself, by his own means or through a credit buyout for example (he becomes the owner automatically and the contract ends), or he offers to another motorist to buy back (the buyer pays the amount of the purchase option to the lessor and automatically becomes the owner of the car).

Transfer the LOA contract to a third party

cash

One of the least expensive solutions is to use the principle of the transfer of leasing, it is to find an interested person to take over the current contract and the vehicle.

We simply change the tenant, a takeover file must be submitted to the lessor, who will carry out a credit study.

On the cost side, the buyer will simply have to pay the transfer and update fees for the registration card. It is advisable to use a leasing transfer platform to quickly find an interested buyer.

Rates, credit and credit buy-back: unheard of for 70 years

Rates continue to fall, beating their record highs, in March 2016 the levels observed were never as low as at the end of the Second World War, enough to awaken the desires for credits and household credit repurchase.

Home loan: lower rates and feasible projects

Home loan: lower rates and feasible projects

The housing credit observatory assesses the level of rates practiced in the production of mortgage loans on the French soil each month. For the previous month, production increased by 26.8% compared to March 2015, which suggests a crazy year in terms of credit and low rates.

Over 15 years, borrowers managed to obtain rates on average of 1.73% over 15 years compared to 1.90% in February 2016. Over the 20 and 25 year terms, the rates increased from 2.17% 1.99% and 2.52% to 2.34%. In other words, all levels have fallen to offer French households good borrowing capacity.

The more the rates are reduced and the more the borrowing capacity swells, so a borrower will be able to carry out his project and will be able to benefit from a larger envelope, whether for the purchase in the old, the purchase in the new or to invest in rental, an emerging trend.

Credit repurchase: savings at the end

Credit repurchase: savings at the end

The rates in the repurchase of credit are not the same because it is necessary to take other factors like the change of direct debit, the negotiation with the banking actors and the insurance which can represent a significant cost. In this month of March 2016, the rates remain lower and close to those practiced for the mortgage, what to realize great savings if the loan was contracted between 2008 and 2010.

Whether in renegotiation or in pure credit repurchase, the conditions are there and some households having renegotiated in 2014 see in 2015 are thinking of having their home loan repurchased a second time, vigilance is required because the share of costs of the operation can be a serious obstacle to the operation. It should be borne in mind that for this type of operation, the gain of money is necessary otherwise the borrower has no interest in using it.

Regarding the grouping of several loans in one

loan consolidation

Rates also fell for the second quarter, whether within banks or on banking intermediation networks, attractive conditions that can reduce the increase in total cost which will provide households with a smaller and more suitable monthly payment.

Whether for mortgage, renegotiation of credit or repurchase of credit, we offer you a free online simulation with the search for the best financing offers on the market.