Do you want to know what are the five big questions that financial institutions ask themselves to approve a purchase of mortgage debt? Banks have clear procedures for each of their tasks. The transfer process is no exception.
Every time I take the advice of a mortgage loan transfer, I check if my client’s business is adjusting to what banks expect from their businesses. I ask the necessary questions to know how the client is in five aspects, which, basically, the financial institution will verify to decide if it wants to establish a business relationship with a potential client. I explain to you:
How much do you owe?
The business starts with the information of how much you want to ask the bank. That depends on everything. The amount of the credit determines the rate and, of course, the borrowing capacity. It is not the same to ask for S / 1, 000, 000 than S / 100, 000. The entities establish price ranges (rates) according to the value of the debt. And, of course, verify that the client can pay the fees for that credit.
In a transfer it is normal that the value you owe the bank is requested. Thus, when they make the disbursement, you can pay all the debt and continue the business with the entity that approved the transfer.
At what rate did they lend you?
The bank verifies the Annual Effective Rate (TEA) and the Annual Effective Cost Rate (TCEA) with which you made the loan. The question asked by the bank is: can I compete with a better offer and conquer this client? The financial institution is interested in staying with your business, and knows that the only way to do it is via rate. You want savings. They know.
Whenever you get an offer, check both rates. The TEA and the TCEA, the latter includes all credit costs; for example, the cost of the lien insurance and the cost of the property insurance, among others.
How many months left to finish paying the credit?
Financial institutions are friends of the long term. They will prefer if many years remain. But they won’t exclude you if few are missing. Time is part of the financial equation. Amount, rate, time are the variables necessary to establish the value of the monthly fee.
If you are interested in other products of the bank to which you are requesting the transfer, it is time to speak. It is important that they value the customer and all their businesses.
How is your borrowing capacity?
This aspect is key. Entities will review your economic situation. Now you know. You must submit all documents that prove your income, whether you are independent or dependent. Each bank has its list of documents. Of course, it will check the information you submit. The ideal is to show that you can pay the credit and all other normal expenses of life.
How has your financial behavior been?
This question is very important. I left it for last as the famous dessert cherry. Without it, there is no emotion. As well. All financial institutions will assess whether you have been paying your mortgage loan installments, including your credit card fees and other debts. If you are reported, it is preferable not to initiate the transfer request. Unfortunately, if you have had some difficulties and have not been met with the fees, the bank could refuse the business.
The ideal is to take care of credit behavior. You never know when you need to show it to do good business.
A purchase of mortgage debt is made with the objective of improving business conditions, that is, the rate, the fee and the final value of the credit. Also, you could consider changing the term, more time or less time, depending on your needs. Saving is what should be targeted.