Prepare for retirement with a loan buy-back
When retirement age comes, it is good to take advantage of your free time and for that it is better to have cash. How to save money? For example, on the cost of your credits or on the amount of your monthly payments which can be renegotiated on advantageous conditions thanks to a well-carried out loan buy-back.
The retirement is there. Unless you are prepared for it, your income will inevitably drop even though your expenses are the same. The solution may then be to lower your credit charges by renegotiating your existing loans to lower the cost and the monthly payments. With current rates going down to historic records, you can save a lot.
For example, when the rates were 4.20% in March 2012, the total cost of a mortgage of 200,000 USD over 20 years was around 95,954 USD. The same loan taken out today would cost around 69,341 USD. A saving of – 26,660 USD!
How do you go about making a successful loan buyout?
It is important to consider several criteria. First, you have to take into account two parameters:
– A difference in rate between the current rate of your loan and the renegotiated rate greater than 1%. (A difference of 0.6 to 0.7% can sometimes be enough for certain long loans of a large amount.)
– A low age of the loan in order to take maximum advantage of the rate differences on the interest due.
Finally, do not forget that the Lagarde law of July 2010 allows the borrower to take out loan insurance different from that offered by his lender. This will allow you to further reduce the cost of your loan insurance and add a few thousand USD in additional savings.
Our advice: in all cases, a loan repurchase broker will allow you to optimize the conditions of your transaction. The specialists at Spin Lender support you, for example, in setting up your file, they guide you towards the most advantageous loans, and facilitate all the steps to follow in order to successfully buy back loans. Perform a simulation