To find out what is the outstanding capital or what is the term of the loan, a borrower uses its mortgage loan schedule. This depreciation schedule details all the monthly payments with interest, capital and insurance. During a credit redemption, he can also ask his bank for a prepayment that will be sent to the new bank to unlock the funds.
Decrypt the mortgage loan schedule
There are two main types of depreciation tables. Depreciation or straight-line amortization is used to repay the same amount of capital on each monthly payment. Interest will fall over the months and the monthly payments will be degressive. This solution is rarely used for individuals. Most of the time, during a real estate acquisition, the bank proposes to repay identical amounts. In this case, the share of capital repaid increases and the interest portion repaid decreases gradually.
This formula may also have some flexibility. The flexible amortization allows to vary its repayments according to the evolution of its income. This practice can be solicited particularly by borrowers whose income is not regular: independent, temporary, intermittent entertainment… It is also sometimes possible to opt for a deferred depreciation table. This is to delay the maturities rarely on the entirety of the credit, often on the capital.
In the latter case, the borrower begins to repay interest and credit insurance. This type of mortgage loan schedule can be requested to avoid paying two homes when the buyer is doing work or had his home built, for example.
In which case request the prepayment settlement?
The mortgage loan schedule provides the borrower with the most important information on the evolution of the loan until its term. Examining it carefully makes it possible to check the relevance of a renegotiation or a repurchase of credit. If other credit institutions offer the borrower better terms, he will then have to ask his bank for the advance settlement.
The document is essential for the new organization to proceed with the early repayment of the current credit before the subscription of a new, more advantageous mortgage. As banks are reluctant to provide this document, it is advisable to make a formal written request as soon as possible. It must also be ensured that no penalty is applicable or taken into account in the negotiation.