To access credit consolidation, a deposit is sometimes necessary. But is it necessary to use the family guarantee? The point on the three types of buyout of credit with guarantor. The story is on http://www.bodasms.com/payday-loans-consolidation-read-more-about-payday-loan-debt-consolidation/

A third party as guarantor

A third party as guarantor

When borrowers submit a loan repurchase request to a financial institution, it is sometimes to benefit from better conditions thanks in particular to the fall in interest rates, but it is often to reduce the monthly payments in order to cope, for for example, job loss or newly contracted credits. The bank can thus ask for a guarantor. The borrower then generally turns to his parents or relatives whose financial income is higher.

This guarantor then undertakes to replace the borrower if he cannot repay his monthly payments. The credit institution is then reassured and can more easily grant a credit buyout with guarantor.

If the guarantor owns his or her own business, a certified public accountant (CPA) must provide a letter stating the guarantor’s income.

Use the bonding organization

Use the bonding organization

Borrowers cannot always call on relatives to guarantee the loan repurchase. On the other hand, they have the possibility of requesting specialized organizations. The guarantee organization undertakes to reimburse the installments in the event of default by the borrower. This insurance, which also allows you to group your credits together, comes at a cost. Indeed, this type of bond for repurchase of credit costs approximately 2%, even 3% of the sum guaranteed, which can represent a significant sum in the context of mortgage loans.

Zoom on the mortgage guarantee

Zoom on the mortgage guarantee

There is a third way to benefit from a credit buyout with guarantor: the family mortgage guarantee. In order to make a loan application file more solid, it is possible to offer the financing organization the mortgage of a parent’s real estate. This solution can only be considered if the lending institution can be the first beneficiary during a possible foreclosure of property.

We are talking about a first mortgage. Finally, note that the repurchase of credit with mortgage guarantor must constitute a last resort since the mortgage guarantee supposes notary fees unlike the guarantee of a third party or a surety body.

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