Credit portability is a way to improve the payment conditions of a debt. This happens by migrating from one financial institution to another. This operation can be done with several credit lines, including real estate financing.
With the Selic rate falling, interest rates on mortgage loans also fell. Still, many Brazilians are stuck with the financing conditions of when they made the transaction. Thus, they continue to pay fees above the market average. Credit portability allows the debt to be transferred to another bank that offers rates in line with the market. This allows for great savings.
What is credit portability?
Credit portability is an option for those who want to reduce interest rates on a debt. Basically, it is possible to exchange an expensive debt for a cheaper one. This is because some banks have higher interest rates than the competition. If this is the case for your bank, it is possible to request credit portability to an institution that has better conditions.
In addition to more attractive interest rates, it is possible to require credit portability for a bank whose service quality is better. Thus, this operation was created by the Central Bank to generate more competitiveness among financial institutions. In this way, better conditions for consumers are offered.
The request for credit portability can be made at any time. It is enough that the contract is canceled and the debt with the original bank is paid off. However, it is important to note that the new credit operation cannot have a value and term greater than the original contract.
How does credit portability work?
There are some steps to be followed for credit portability by park view city. They ensure that you make the best decision for your budget.
Compare interest rates
Always remember to thoroughly research the options of various financial institutions. Simulate the values and compare interest rates and Total Effective Cost.
Contact your current bank
To start credit portability, you need to request some information about your debt. It is worth remembering that the company has an obligation to provide this information.
- Contact number;
- Updated debit balance;
- Statement of the evolution of the debit balance;
- Payment system;
- Credit modality;
- Value of each installment (specifying the principal and charges);
- Annual interest rate (nominal and effective);
- Total and remaining term;
- Date of the last maturity of the operation.
Decide the bank that best suits you
After analyzing your options and obtaining all the information about your debt, look for the new institution. Your current bank cannot prevent portability from being made. However, the new creditor is under no obligation to accept the transfer.
After the acceptance of the new bank, the chosen financial agent makes the payment of the debt and takes on the new loan. Credit portability is permitted for individuals on lines such as: credit card, overdraft, personal and payroll loans, vehicle financing and real estate financing.
How does real estate financing portability work?
Mortgage credit portability happens in a similar way to credit portability. The operation consists of transferring a mortgage from one financial institution to another without charge for the transfer. The new financing must maintain the value and term of the contract with the home financial institution. Interest rates can be negotiated and that is why it is important to research the best conditions.
The new bank settles the borrower’s debt to the original bank and offers other conditions to finance what remains. However, it is important to check with the new institution the payment terms for all costs of the operation and not just the Total Effective Cost (CET). This is because costs such as property appraisal fees and documentation costs must be placed at the tip of the pencil.
The credit portability operation can be done as many times as you wish. However, even if there is no limit or maximum value for portability, it is an important and bureaucratic decision. So, the tip is to choose the financial institution very carefully to avoid future changes.
When to ask for credit portability
Any change in our lives requires a lot of analysis, especially when we talk about the financial sphere. The idea of opting for a new type of credit may come from the need to pay off debts that were hitherto very high and start to boost personal projects. Thus, deciding on the operation or not will depend on your needs.
However, a few points can help you make that decision. For example, portability will only be worthwhile if the Total Effective Cost (CET) is less than the previous one. Do not take into account only the monthly interest rate. This is because, together with it, several rates are added that end up making the loan more expensive. To avoid problems, the company needs to provide the final amount charged before the start of the operation.
The total value of debts
Try to start credit portability only when you know exactly your outstanding balance. Thus, it is possible to negotiate payment terms more precisely. Request the amounts from the bank where you have the original debt. If the institution makes it difficult to access this information, the customer must file a complaint with the Central Bank.
Organize the budget
Organizing your finances is critical before opting for credit portability. That way you will know how much you can dedicate to paying off debts. The ideal is to start with your paycheck and check your net salary. From this it is possible to establish the exact amount that enters your checking account and separate your fixed expenses, that is, those that cannot be eliminated. Record expenses such as rent, condominium and school fees.
Then see what the variable expenses are and plan which ones can be cut to decrease the amount pledged monthly. In these situations most people cut expenses like clothing and trips to restaurants. Also, be sure to think about costs like vacations and holiday travel.
Finally, compare the size of the debt and the monthly installments with your income. The recommended thing is that it is possible to settle everything without compromising more than 30% of your budget. In this way, credit portability becomes really advantageous.
Each financial institution offers different conditions. Thus, it is very important to compare the options before deciding which will be the new institution. Most banks offer the option to simulate values and conditions. Thus, it is possible to know how much your final debt will be. This simulation can be done online, avoiding the inconvenience of going to a physical agency.
Credit portability: a new financing model
Real estate interest rates are among the lowest in history. With this, credit portability operations have become advantageous for those who want to reduce the costs of old contracts. This happens, because by transferring the debt to another bank, the buyer can reduce the value of the installments, improving the conditions of the loan.
This is also the ideal time to purchase your own property or move. As stated, the financing conditions are favorable due to the lower interest rates. To purchase a home safely and minimizing problems, count on security professionals. Casa MineiraImóveis has a portal with several properties that are sure to meet your needs.