Banks offer flexible lending formulas that make real estate credit a flexible service that can adapt to the financial situation of the borrower.
What is the modularity of a loan?
Modularity is an option that allows you to change the monthly payments of a loan according to certain rules defined by the bank. Thus, the flexible loan allows the beneficiary to increase, decrease or even suspend its repayment dates.
Notice to be respected
Banks allow modularity after a certain period, usually two years after the first amortization for constant repayments.
For loans repayable in stages (when there is smoothing mortgage loan), we must wait most often the anniversary date following the last phase of amortization.
In addition, it takes some time for the desired change to be effective.
Suspension of the mortgage
The beneficiary of a real estate loan has the possibility to ask for the suspension of a real estate loan, provided to respect a notice which is variable according to the banks, on average of 30 days.
No need to ask for a loan suspension if you only want to avoid taking the current month.
How long can a credit be suspended?
The ability to suspend a mortgage is limited in time. For example, you will not be able to suspend in any longer than 24 months, some organisms even limiting the total duration of the suspension to 12 months.
Change the amount of repayment dates
Because the financial situation of a household is likely to change, flexible loan contracts allow the borrower to make changes to the amount of the monthly payment. As a general rule, the first modification of the deadline may occur, as is the case for suspension, after two years.
This change in repayment may not be lower than a certain amount, expressed as a percentage of the monthly installment of the mortgage.
In addition, it can intervene only from the first amortization following the anniversary date of your credit.
Can the bank oppose modularity
It should not be thought that the flexibilities granted by the Flexible Loan are automatic. The bank can oppose the request for an increase if it does not seem consistent with the income and if the debt ratio of the borrower exceeds 33%.
- To go further: calculate your maximum debt authorized by the bank.
On the other hand, nothing should be opposed to a possible request to reduce your deadlines.
The flexible loan can generate a significant additional cost. Always ask your bank to calculate the exact consequences if you were to use this flexibility.