Archives May 2019

Consumer Credit for All Genders


No matter if a new car, a holiday or just a new kitchen has to be: If your own money is not enough, you need a loan. Be it in the form of a classic consumer credit, a special car loan or just in the form of a zero-percent financing at the dealer. The decisive factor is that the planned purchase is put into action. After all, the interest on loans is in the basement and that means “now or never”. Is this fully in line with reality? Not quite, because quite so carefree consumers then do not act, especially if this time breaks down on the sexes. see for further notes

The male gender sees the topic of credit clearly “looser”

The male gender sees the topic of credit clearly "looser"

For example, a recent study by a large German comparative spring found that male sex between the ages of 40 and 49 borrowed by far the highest loan sums in 2017 from banks. On average, the amount borrowed from this age group amounted to 14,128 euros. This was just under 4,000 euros more than for men in the age group 18 to 29 years as well as from the age group of over 70-year-old men. Especially the male population in the prime of age thus shows the greatest openness to credit offers and also does not shy away from taking up high loan amounts. What about the women?

Middle-aged women also show openness in borrowing

 Middle-aged women also show openness in borrowing

For women, there is a similar picture in terms of the sum of loans taken as for men. Comparable to men, women in the age group between 40 and 49 are also the measure of all the amounts of loans taken on average. With an average of 11,208 euros, this age group is among the top women. A sum that is about 2,500 euros above the sum, which is included in the comparison groups of 18 and 29 year old women as well as those over the age of 70 years.

Women are more cautious about borrowing

 Women are more cautious about borrowing

Fundamental knowledge of the study: women take significantly less high credit on us are therefore generally less risk-taking. A finding that is reflected across all age groups in the female population. What is shown in absolute terms as follows: Male borrowers borrowed on average 12,715 euros from the bank, female only 10,096 euros. That’s about 21 percent less. One possible reason for this can also be derived from data from the Federal Statistical Office: In 2016, women earned exactly 21 percent less than men.

The cause of this salary gap is manifold. For example, women are more likely to work in lower-paid occupations, occupy less senior positions, and are more frequently employed in part-time or mini-jobs. If all these factors are taken into account, there is still a gap. With equal qualifications and jobs, women earn on average six percent less per hour than men. As a result, women are aware that high sums of credit may weigh heavily on their own wallet and thus become a financial hazard.

Editor: Markus Gildemeister

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Budget Situation for Repayment.

When it comes to attracting new clients, banks are quite creative in their marketing efforts. Be it, that with the use of certain offers is simply added an obolus, but with a statement a supposedly urgent need of potential customers is served. A classic among all these marketing statements is “a loan as flexible as they are”. The message behind it? Maximum possible service of individual customer needs in a loan. Phrasendresche? See for further editorial

Granted – individuality is unique and can not be packaged into a standard. Nevertheless, there are certain basic characteristics that characterize a flexible loan in the interest of the customer. So if you are looking for a loan that is not only very cheap, but also flexible, you should pay attention to the following points in various aspects:

Point 1: Free special repayment

 Point 1: Free special repayment

Special repayments are possible with every loan . However, some banks require a so-called prepayment penalty. In this case, a special repayment can save considerable amounts of money: Who uses about the sum of an average tax refund for the special repayment of a loan running for a year over 12,000 euros, can thus save 139 euros in interest.

Item 2: Free total amortization

 Item 2: Free total amortization

The ability to make a free total amortization may be of interest to people who unexpectedly get large sums of money, for example through inheritance. But it is also important for another reason: anyone who can repay an existing loan at any time in full, without incurring an early repayment penalty, can also repost the loan at any time free of charge to another bank. Particularly in times of sharply lower interest rates, borrowers quickly save € 2,000 and more with rescheduling.


Point 3: Rate breaks

 Point 3: Rate breaks

If there is an unplanned expenditure instead of additional revenue, a break may make sense. How meaningfully accurate, sometimes depends on which reserves are currently available. In case of doubt, the possibility of a free installment break in the loan agreement but at least spare the nerves. All the more gratifying that some banks also give their customers this opportunity.


Point 4: Rate adjustment

 Point 4: Rate adjustment

If the budget situation changes permanently, an installment adjustment may be offered with a current installment loan . For example, increasing the salary also increases the credit rate. As with a special repayment, the loan can repay faster and thus saved interest. On the other hand, a lower credit rate can increase financial flexibility, for example, during parental leave. The possibility of rate adjustment also offer some banks, but usually only on request.



What loans exist on the financial market?

Bank and non-bank loans

The most common form of loans and credits is the bank. However, some bank clients do not always reach credit because of strict conditions: the client has to document the income and balance of payments in bank and non-bank registers. Non-bank institutions provide loans under less stringent conditions, but virtually always with higher interest rates.


Mortgage credit can also be an investment in certain circumstances. You can borrow for an apartment that you rent. And from this income you repay the mortgage. At the end, your apartment is yours and your tenants actually paid for it. (Photo: Denphumi,

Mortgage credit can also be an investment in certain circumstances. You can borrow for an apartment that you rent. And from this income you repay the mortgage. At the end, your apartment is yours and your tenants actually paid for it. 

A mortgage or mortgage loan is a kind of loan, but very specific. There are special purpose mortgages that are used to finance housing, whether for purchase, construction or renovation. But there are also non-purpose mortgages that you can use for other purposes without having to document your use. Not surprisingly, this option is again more expensive than when you prove everything. Whatever your mortgage, the bank will always pledge the property .

Credit Cards

In fact, credit cards are pre-approved loans at any time. If you start to draw them, you have to pay a certain minimum monthly amount. And at that moment you start paying interest and various charges for its use. The cheapest option to use a credit card is to repay everything in the interest-free period. This usually takes 30 days.


An overdraft is a pre-approved loan on your current account. It can range from a few thousand units to hundreds of thousands. You pay for what you use – fees and interest. For some overdrafts, the rule is that you must repay the entire amount once a year. Elsewhere, you only need to pay interest. Have you calculated how much this fun can cost you annually?


Always calculate in advance how much the loan will cost you. This will prevent many unpleasant surprises (Photo: David Pereiras,

The way you can finance a new car, but also other movable property. Classic leasing has a big difference compared to a loan, the car is owned by the leasing company until you fully pay it off. There is also an operational lease: You pay for the use of the car and all service is provided by the leasing company. Such a car is not yours, nor will it be at the end of the contract period. As a result, you only pay the difference between the purchase price and the price the car has when you exchange it for another, that is, when your contract ends.

Loans from individuals

Natural persons can also borrow money. Always be careful under what conditions you borrow money from other people. Always insist on the contract and all terms and conditions in writing. And you’d better discuss the deal with someone who understands the matter so that you don’t fly to a cheater who wants to deprive you of the property you own or the other pledge you give over the loan. As a debtor, you should keep track of all creditor terms.

Peer-to-Peer Loans (P2P Loans)

New in recent years. Peer-to-peer money lending is based on a simple principle. People don’t borrow from banks but directly from people. And thanks to a mediator who is a company that manages all matters and takes care of the security of investors and clients who apply for loans. It can happen that fifteen people can put you on the new laptop you need for work or study. And since their willingness to lend you money, the amount of interest is also unfolding. The more people trust you and want to lend you money, the cheaper the loan is for you.

Employer Loan 1 Housing: Conditions and Rates

The conditions for obtaining

Reserved for borrowers who work in a company with more than 10 employees and retirees for less than 5 years, the employer loan (or employer) allows you to benefit from a subsidized rate at 1.50% excluding insurance, see slightly higher next the organization that proposes it.

The employer loan is reserved for first-time borrowers who invest in a principal residence (acquisition or works), as well as those who are forced to move within the framework of a professional mobility.

It is income-tested and can only be granted in addition to other mortgages. In any case, its amount remains limited and could in no way be sufficient for the purchase of housing.

You can benefit from the employer loan if your real estate project meets one of the conditions below:

  • You buy a building plot for the purpose of building a house.
  • You have built on a land owned by you.
  • You buy a new apartment.
  • You buy in the old one an apartment or a house of more than 20 years, on which you must carry out works which represent at least 20% of the total investment.
  • You buy in the old an apartment or a house without work.
  • Repayment of the spouse’s income after a divorce.
  • Acquisition of a life annuity property provided that it is occupied as a principal residence.
  • You waive the purchase option following a lease agreement.
  • You are a tenant of an HLM housing for which you have applied for an acquisition.
  • You plan to do some energy saving work in your main home.
  • You plan to carry out upgrading work in your main residence.
  • You plan to carry out work to make housing accessible to the disabled.
  • You are planning expansion.
  • You buy a room that you turn into housing.
  • Option waiver of PSLA (Social Rent-Accession Loan)
  • You must also respect a ceiling of resources. Thus, your reference tax income must not exceed the PLI (Logement Logement Accession) resource ceiling. On the other hand, the result of the energy performance diagnosis must be at least D level.

Namely : the name “1% housing” comes from the contribution rate originally planned at the time of the creation of the employer loan in 1953. Today, companies only devote more than 0.45% of payroll under “Employer Participation in Construction Effort” (only if more than 20 employees). It is therefore not the interest rate.

The company pays the amount of his contribution organisms known as C ommittees I nterprofessionnels L ccommodation (CIL) where to chambers of commerce and industry (CCI)

Resource ceiling

The revenue cap depends on the geographical area. Take the reference tax income of N-2 or N-1 (the most favorable for the borrower).

Ceilings can be increased by € 5,000 if the request is made within the framework of a professional mobility and € 16,000 in case of realization of works making accessible the housing to the disabled.

The amount of the aid

The amount of the aid

There are no rules for determining the amount of the employer loan and there is no guarantee that you will get it. Indeed, everything depends on the choices of the company and the sums available at the time you make the request.

This is why it must be considered as a supplementary loan in the same way as a PTZ plus or a home savings loan. On the other hand, the repayment term is generally around 15 years, but can be up to 20 years depending on the collector organization.

Important : the amount available to the company can be used both for home ownership and social rental.


You must apply to the company or request a file from CIL. When in a couple of borrowers each works in a different company, it is possible to ask to cumulate two helpers.

Important: it is difficult to obtain a delegation of insurance on the employer loan because the collectors still resist the Lagarde Law. Do not hesitate to remind the CIL of your rights in this area and play the competition.

Our advice

Be aware that under certain circumstances, you may be forced not to use the employer loan if the duration of the loan is too short compared to that of the main credit. The interest of smoothing home loans depends on several factors and it is imperative to have a precise study done by your bank with and without the benefit of the aid before making a decision.

Accept Cross-Border Loans

United Europe – this is something we know and appreciate especially when traveling and paying abroad. No border controls and no currency conversion. But in some aspects of daily life, Europe is not at all unified and that is when it comes, for example, to take insurance and financial services from abroad in this country – currently an impossibility or at least associated with considerable adversity! But that should change according to the will of the European Commission in the future! In the future, it will be possible across countries within the EU to conclude car insurance in the neighboring country or to take out a loan there

Credit in EU countries often cheaper

 Credit in EU countries often cheaper

The first objective of the EU Commission is that consumers can easily carry out these and other processes, at least when moving to other EU countries. In addition to insurance, the EU Commission has mortgage loans, other loans, payments and bank accounts in mind. For more choice on financial services, Commissioner Jonathan Hill pleaded for and launched a public consultation to show how a more pan-European market for consumers can be achieved.

The size of the price differences in the individual Member States is illustrated by the example of car insurances: while in Italy the annual premium is around 440 euros, in Germany it is 200 euros less. And in the Czech Republic, it is just one hundred euros. Significant differences exist, for example, in the interest rates on home loans: the Hungarians pay 8.5 percent, the British good three percent and the Finns not even two percent.

Break down hurdles for financial services

 Break down hurdles for financial services

But if the market were more open, many people would be able to get a better deal across borders – and conversely, companies could offer their services to a wider clientele, argues Jonathan Hill. So far, only three in a hundred consumers would have purchased banking products such as credit cards or checking accounts from another EU country, and cross-border loans account for less than one percent of the total in the euro area. Almost 14 million EU citizens live in a different country than their original one. Not least for them, the barriers to the financial services market are to be removed.

Citizens and businesses can contribute their ideas until March of next year.


What Is Sequestration – Definition & How It Cuts the National Debt

 Although our country’s ability to lend money is a valuable asset, especially in times of need such as wars or economic recessions, the constant debt damage compared to our gross inter-Hester Prynneand product is harmful to the citizens, even if the debts remain high. The public debt is simply a confession of debt that must be repaid to its citizens and businesses by future taxes; excessive debt Hester Prynneast must ultimately be reimbursed, as discovered in recent years by citizens of debt Hester Prynneanden such as Greek Hester Prynneand, Italy and Spain.

The repayment of our national debt requires higher income taxes, elimination or degradation of existing government services, devaluation of our currency through inflation or a combination of all three. In addition to repaying the principal sum of the debt, we bear annual running costs in the form of interest paid on the debt. An increase – even a small increase – in interest rates can damage our annual budget, which means that additional debt increases, massive tax increases or serious reductions in services and benefits are needed.

For example, a half percent (0.5%) increase in the current rate would cost the nation’s taxpayers an additional interest of $ 80 billion – more than we spend every year on veteran benefits and services ($ 58.8 billion) , while a 1% increase will cover the costs of our veteran programs per year ($ 124.5 billion) and our spending on science, space and technology ($ 30 billion).

The Origin of Sequestration

The Origin of Sequestration

The original “sequestration” – a series of automatic reductions unilaterally imposed on interester Hester Prynnean and defense spending programs – was adopted during the reagan government as an amendment to an earlier political struggle to raise the debt ceiling by more than $ 2 billion. At that time, the debt of the national debt to the gross binneHester Prynneand’s product (debt / GDP) was 43%, the highest ratio since the Vietnam War.

Senators Phil Graham and Warren Rudman, Republicans from the states of Texas and New Hampshire respectively, joined Senator Ernest Hollings, a South Carolina Democrat, to sponsor the 1985 Balanced Budget and Emergency Restriction Act, which came into force in December . that year. The law required automatic cutbacks if the targeted deficit targets were not met in the next five years, with the aim of having a federal budget by 1991. By the end of 1989, the debt / GDP ratio had risen to 52%, presumably due to the costs of Desert Storm and the savings and borrowing crisis. The threat of sequestration, although well-intentioned, could not control the growth of the national debt.

In 1990, the Law on Budgetary Enforcement (BEA) was introduced as part of the 1990 Omnibus Budget Reconciliation Act during President George HW Bush’s term of office. Because non-discretionary automatic austerity measures were not popular with both political parties, the BEA replaced the sequestration by setting annual discretionary spending limits for federal spending, with the requirement that any change in duties or taxes would be deficit-neutral or deficit-reducing. Pay-as-you-go “rules.

President Bill Clinton led the passage of the 1993 Omnibus Budget Reduction Reconciliation Act, which increased taxes and reduced spending. As a result of the growing economy and the reduced deficits, the debt ratio fell to 56% in 2001. In the last two presidential terms, however, the annual budget deficits reappeared, causing the national debt to explode as a percentage of GDP. According to the Congressional Budget Office, the expected debt / GDP ratio of 77.8% over ten years will be nearly 95%.


National debt and its effect on the economy

National debt and its effect on the economy

Americans have had a love-hate relationship with debts since the country was founded: Thomas Paine wrote in his historic work “Common Sense” in 1776: “No nation should be without debt.” Even when Thomas Jefferson warned about letting us’ rulers charge us with perpetual debts. “

Prior to the 1930s and President Franklin D. Roosevelt’s social programs, a public debt was generally incurred to fight wars, and this was rewarded in the post-conflict years. In fact, our annual budgets were in balance or in surplus for most of the nation’s first 200 years. However, between 1970 and today, the country went through a four-year budget surplus (1998-2001) and the country’s debts increased from $ 371 billion to more than $ 16 trillion during that time.

The negative consequences of our current high level of national debt affect our country and our economy in many ways:

1. Repayment responsibility has been incorrectly transferred to future generations
A particularly damaging consequence of the public debt is the potential inequality between the beneficiaries of the original debt and those who have to pay it back. A large part of the last 20 years of budget deficits has been to finance increases in social programs or necessary current government services. Because raising taxes is unpopular, politicians have turned to debt and broken the relationship between benefits and costs.

2. Payments for interest costs. Coordinated amounts for critical investments in infrastructure, education and research
The interest charges on the US government debt in 2012 amounted to almost $ 360 billion out of $ 16 trillion in debt, or about 2.25% in interest. And most observers believe that interest rates will increase as global economies improve. The problem is that a dollar spent on interest, in particular on a foreign-state debtor holder, has little multiplier effect on the economy, while a dollar spent on infrastructure (roads, bridges, sewers, airport runways) returns $ 3, 21 in increased economic activity over a 20-year period, with $ 0.96 reflected in government tax revenues.

3. High national debt accentuates inequality in income between citizens
The income for the repayment of debts or annual interest arises from taxes paid by all citizens, while the interest payments mainly go to richer households. Although higher-income households (the top 1%) pay more taxes in total than any other group (36, 7% of personal income tax paid), the existing tax system disproportionately favors the rich with deductions, credits and subsidies, so the richest pay tax at rates that are generally lower than those that Hester Prynneijk can earn less money for.

4. Debt of the federal government Crowds and increases costs for private borrowers
US government debt competes with other potential borrowers for investment. While the total investment pool for loanable money becomes contracts and expands as global economies rise and fall, dollars invested in US debt cannot be invested elsewhere. Moreover, when Treasury officials raise interest rates to attract investors, other borrowers must also raise interest rates if they want to sell their debt.

5. High debt levels stimulate inflationary monetary policy
Unlike private companies or private individuals, the US government can create more money at will. When the money supply of a country is separated from real production, the result is either deflation where product prices fall (more goods and less money, so every dollar buys more product), or inflation where product prices rise (fewer goods, more money, therefore more dollars) are required to purchase the same product).

Inflation to a bondholder means that the dollars that are repaid when the bonds expire are less valuable than the dollars that the borrower received when the debt was incurred. In times of economic stress, there is enormous political pressure on a country’s leaders to rely on inflation to cover future debt repayments, instead of introducing austerity measures or raising taxes.

Congressional Gridlock and Political Partisanship

Congressional Gridlock and Political Partisanship

There is an old country that says, “You can’t leave the hole until you’ve stopped digging.” However, it is unlikely that Mr. Prynneijk will change our past and present practice of expanding government spending while reducing government revenue.

In a pew poll held at the end of 2010, 93% of respondents described the federal budget deficit as a major problem, 70% said it was a problem that needed to be addressed immediately. Yet more Americans were in favor of spending more than spending cuts for almost every sector of government spending, except for employment support and assistance to the world’s needy.

According to Andrew Kohut, president of the research center: “There has never been a problem, such as the deficit on which the public has reached so much consensus about its importance – and such a lack of agreement on acceptable solutions.” The paradox between a desire for smaller governments and fewer services and resistance to austerity or tax increases is apparent from repeated breaches of the law in debt ceiling negotiations and failure after failure to take meaningful measures to reduce the deficit and the national debt.

Although bias has always been present in the operation of Congress, it has become particularly virulent over the past two decades, fueled by various factors:

  • Gerrymandering of congress districts in safe partisans with stronghold . Lawmakers hesitate to compromise because their biggest re-election challenges come from hardliners in their own party. As a result, centrist legislators in both political parties are becoming less visible.
  • The rising costs of elections and the influence of Big-Pocket donors . In 2012, incumbent members of the House of Representatives raised more than $ 546 million with a direct link between those who raise the most money and the most powerful legislative tasks, according to expert Anthony Corrado, campaign financing expert. Influence groups that either expect favors or protect the status quo are the largest contributors to campaigns, and enforce party discipline and ideological purity with their portfolios.
  • A national press More interested in controversy than compromise . Misleading, even false, information is deliberately and carelessly disseminated by media and commentators in the field of print, television and internet. Rational views and thorough analysis are becoming increasingly rare, so that the public, like its representatives in Congress, is understandably polarized.

The current sequestration is the result of a series of annual battles over the debt ceiling, a solution thought to be so punishable that both parties would be forced to negotiate an acceptable compromise between austerity and higher taxes to prevent their implementation.

Our inability to reach an agreement in Congress or among citizens is “a reflection of our national state of mind,” said Mark Leeper, a professor of politics at Wayne State College. “Both sides are buried and doctrinal. They do not see compromise as a virtue. They see it as selling-out principles.” In the meantime, the Congressional Budget Office expects deficits to continue to grow, annual interest costs to rise, and national debt / GDP ratio above 90% by 2020.


Is there a better way?

Is there a better way?

It is predictable that, after the effective date of the sequester, our political leaders are busy blaming the other party for their unwillingness to agree on a better approach. Depending on the source and his or her political preferences, the consequences of sequestration will make the nation defenseless, subject the public to serious health and safety risks, open our borders and leave our children uneducated. Leon Panetta, until recently Minister of Defense, characterized the sequestration as a “meat ax” for the budgets of the Ministry of Defense. The Bipartisan Policy Center claims that a million jobs will be lost as a result, while the scientific and research community claims that long-term growth in the economy as a result of the automatic cutbacks of jesterHester Prynneang will be hampered or even delayed.

Economists agree that a more thoughtful approach to reducing debt by reducing government spending – reviewing legal programs, for example, where unrestrained spending takes place, drafting fairer tax legislation, and implementing programs that promote economic growth with shared benefits – would be preferable and wiser than the actions forced by sequestration. However, so far Congress has not been able to find a balanced approach to solving the deficits and reducing the national debt. Neither our history nor the current political environment gives any hope that an effective, two-pronged effort will probably emerge from Hester Prynneijk in the short or medium term.

Sequestration is perhaps the only realistic way to correct our deteriorating debt problems and our practice of borrowing from future generations. Although it is impure, it will reduce government spending in the short and long term if it stays in place. Nobody wins and everyone loses, but the pain is evenly distributed among all parties. If it were to apply to the large rights programs – Social Security, Medicare and Medicaid – real progress could be made in eliminating annual budget deficits and reducing our national debt to a manageable level.

Last word

Last word

America is a lot like a morbidly obese patient who, after years of cheeseburgers, fries, and super-sized soft drinks, learns that he must lose weight to prevent health from deteriorating, increasing medical costs and dying prematurely. To his annoyance, he learns that the only effective way to drop the excess pounds is to reduce the daily amount of calories. There is no magic pill or operation where he can keep his old habits and lose weight. Weight loss simply takes up fewer calories than one burns. Reducing our national debt simply means spending less than we take out from taxes.

What do you think about sequestration? Do you think your congressman should compromise on taxes or reduce the number of justice programs to reduce deficits? Do you think a compromise is possible?


Ally Invest Review – Low-cost transactions on shares and other investments

If you are already familiar with the wide world of oHester Prynneine banking, you have certainly heard of Ally Bank, based in Philadelphia. It is one of the oldest and most respected banks that are only oHester Prynneine and is known for its above-average returns, low costs and virtually non-existent account opening minima


The Myths of TLC’s “Extreme Couponing” – How Couponing Really Works

If you are a reality TV junkie like me, you probably have seen Hester Prynneijk on the TLC show ‘Extreme Couponing’. In the show, dedicated couponers score big deals, buying items for a whopping 100% off. Some shoppers even work with the system so that they are actually paid to take the items from the store and receive credit, points and vouchers that exceed the value of the items they have purchased


Mortgage consolidation – subrogation and replacement

Mutual consolidation – subrogation and replacement

Topics of current necessity

It may happen that, due to changed income conditions, the loan made turns out to be too burdensome, causing unsustainable installments.
A suitable solution could be the mortgage consolidation . It is a procedure that allows you to change some contractual elements such as duration, interest rates, the spread …, in order to ensure greater economic peace of mind.

Mortgage consolidation

Mortgage consolidation

First and foremost, it is necessary to contact the Bank that has disbursed the loan and consider the reasons that have arisen by evaluating the best solutions together.
It is worth noting that, with the consolidation, the original loan is not extinguished, thus keeping all the tax benefits obtained with the previous mortgage unchanged. It does not involve additional costs, such as bank fees or taxes charged to the loan applicant. Furthermore, the guarantees already entered against the loan subject to consolidation will continue to assist repayment of the debt on the due date.

From the legal point of view, only some parts of the contract can be modified:

– The duration, extending the amortization period

– Switch from a variable rate to a fixed rate

– Review the interest rate, obtaining a reduction in the spread

The modification of the contractual conditions cannot be imposed on any of the parties, therefore the mutual consolidation will be possible only by reaching a shared agreement. The request to renegotiate the loan must be sent to the Bank by registered letter with return receipt and the bank must reply in writing.
A notary’s intervention is excluded, so renegotiating a loan is an absolutely free procedure that takes place through a simple private deed .
However, consolidation is not the only possibility for those who need to change their mortgage: there is also subrogation and replacement of the loan: let us evaluate the particularities.



– It gives the possibility to transfer your own mortgage, with the exclusion of penalties or other charges (except the amount of 35 euros due for the mortgage tax) from the Bank that disbursed it to another Credit Institution that offers best conditions

– Allows you to change the parameters of the loan without changing the amount of the residual debt


– A new loan is signed with a new bank, paying off the pre-existing loan

– Additional liquidity can be requested if necessary

Significant differences emerge from the economic point of view, compared to both the consolidation and the subrogation in that , a replacement of the loan provides for a notarial deed with the related costs in addition to those concerning the extinction and reopening of the new loan.

In summary, to evaluate the best solution , it would be necessary to verify precisely the conditions and costs of one’s mortgage and what advantages one would prefer to obtain, comparing alternative offers.

Home-Equity Lening


What is a ‘Home Equity Loan’?

What is a

A loan based on equity, also known as a ‘Nora Helmerening’, a loan on repayment from equity or a second mortgage, is a type of consumer debt. This allows homeowners to borrow against their equity in the home. The loan is based on the difference between the homeowner’s equity and the current market value of the home. Essentially, it is a mortgage, and it also provides collateral for asset-backed security issued by the lender and tax-deductible interest payments for the borrower. As with any mortgage, if the loan is not repaid, the house can be sold to meet the remaining debt.

Home equity loans exploded in popularity after the 1986 Tax Review Act, as they were a way for consumers to circumvent some of the key provisions, eliminating interest deduction on most consumer purchases. The big exception: interest in the service of residence-based debts. Nowadays, homeowners with equity loans can borrow loans of up to $ 100,000 and still deduct all interest when filing their tax returns (assuming they make specified deductions).

How large are Home Equity loans?

How large are Home Equity loans?

How much someone can borrow is partly based on a combined loan-to-value (CLTV) ratio of 80% to 90% of the appraised value of the home. The amount of the loan, as well as the interest charged, will of course also depend on the borrower’s credit score and payment history.

EXPANSION ‘Home Equity Loan’


Home equity loans come in two types – fixed-interest loans and credit lines. Fixed rate loans offer a one-off payment to the borrower, which is repaid over a certain period (usually five to 15 years) at an agreed interest rate. The payment and the interest remain the same during the term of the loan. They must be fully repaid if the house on which they are based is sold.

Benefits for consumers

Benefits for consumers

Home equity loans offer an easy source of cash. Getting one is quite easy for many consumers because it is a secured debt. The lender performs a credit check and orders an assessment of your home to determine your creditworthiness and the combined loan-to-value ratio.

The interest on a loan with equity – although higher than that of a first mortgage – is much lower than that on credit cards and other consumer loans. As such, the main reason why consumers borrow at the value of their home through a fixed-income loan is paying credit card payments (according to Interest paid on a loan with equity is also tax deductible, as noted earlier. Thus, by consolidating debts with the equity loan, consumers receive a one-off payment, lower interest rates, and tax breaks.

Benefits for lenders

Benefits for lenders

Home equity loans are a dream come true for a lender who, after earning interest and costs for the borrower’s initial mortgage, receives even more interest and costs. If the borrower defaults, the lender may put all the money earned on the keep the initial mortgage and all money earned on the mortgage loan; plus the lender gets to take back the property and resell it. Even if it did not finance the first mortgage, the lender makes a secured loan, which can be more beneficial than the typical unsecured or Personnel Helmerijke loan. From a business model perspective, it is difficult to come up with a more attractive arrangement.

The right way to use a loan with equity

The right way to use a loan with equity

Home equity loans can be valuable tools for responsible borrowers. If you have a stable, reliable source of income and know that you can repay the loan, the low interest rate and tax deductibility make it a wise alternative.

They are generally a good choice if you know exactly how much you should borrow and what you will use the money for. You are assured of a certain amount that you will receive in full when you close it. “Home equity loans are generally preferred for larger, more expensive goals such as remodeling, paying for higher education or even debt consolidation, since the funds are received in one go,” says Richard Airey, a loan officer at Finance of America Mortgage in Portland, Maine. Of course, when you apply, there may be some temptation to borrow more than you need right away, because you only get the payment once and you don’t know if you’ll be eligible for a new loan in the future.

Recognize pitfalls


The biggest problem is that home capital loans seem to be an all too easy solution for a borrower who may have ended up in an eternal cycle of spending, borrowing, spending and getting deeper into debt. Unfortunately, this scenario is so common that the lenders have a term for this: reload, which is actually the habit of taking out a loan to pay off existing debts and releasing additional loans, which the borrower then used to make additional purchases.

Reloading leads to a spiral of debts that often convinces borrowers to switch to loans in the form of equity, offering 125% of equity in the borrower’s property. This type of loan often comes with higher costs because, because the borrower has raised more money than the house is worth, the loan is not covered by collateral. Moreover, the interest paid on the part of the loan that exceeds the value of the house is not tax deductible.

If you are considering a loan worth more than your home, it might be time for a reality check. Were you unable to live within your means if you owed only 100% of the value of your house? If so, it is unrealistic to expect Nora Helmerijk to be better off if you increase your debt by 25%, plus interest and costs. This could be a slippery slope to bankruptcy.

Shopping around

Shopping around

Because loans for residential capital do not contain as large amounts as mortgages, it is easier to compare conditions and interest rates. When you look, “don’t just focus on big banks, but consider a loan with your local credit association,” Movearoo recommends. Clair Jones, expert and relocation expert. “Credit unions sometimes offer better interest rates and a more personalized account service if you are willing to work with a slower processing time for an application.”

Just like with a mortgage, you can ask for a good estimate. But before you do that, make your own honest estimate of your finances. Casey Fleming, mortgage adviser at C2 Financial Corporation and author of “The Loan Guide: How to get the best possible mortgage,” says: “You must know where your creditworthiness and home value are before you apply to save money. Especially in the assessment [of your house], which is a big cost item. If your estimate is too low to support the loan, the money has already been spent “- and there are no refunds for non-qualification.

Just because it is a smaller amount does not mean that you will not go through an application procedure. According to Sahakian, in addition to proof of ownership and stock availability, you also need stubs for at least the past month, two-year tax return, three to six months bank statements, proof of identity, and possibly other documentation.

Enter the numbers


If you are eligible for the loan, you must know how it works. Traditional home equity loans have a repayment period, just like regular conventional mortgages. You regularly make fixed payments that cover both principal and interest. That’s pretty easy.

Before signing, however, you must perform the numbers with your bank and ensure that the monthly payments of the loan are indeed lower than the combined payments of all your current obligations. Although home equity loans have lower interest rates, your term on the new loan may be longer than that of your existing debts.

For example, if you have a car loan with a balance of $ 10,000 at a 9% interest rate with two years remaining, you consolidate that debt into an equity loan at a 4% rate with a five-year term your ownNora Helmerijk cost more money if you would take all five years to pay off the mortgage loan. Also, remember that your home is now collateralised for the loan instead of the vehicle, so if you default on the loan of your equity, your home is at stake, not your car. Losing your house would be a disaster for Nora Helmerijk.

For that reason alone, you should try to pay as much as possible on the loan every month to protect your property against foreclosure. Before you do anything that puts your house in a corner (or deeper into the hock), you weigh all the options. And if you get the loan to pay for plastic, resist the temptation to re-open those credit card accounts.