Monday, 18 November, 2019

Almost no one has taken advantage of the opportunity to redeem a loan


I have just read the MNB’s statistics that a small percentage (!!) of foreign currency lenders have used the option of free credit redemption.

This is very sad because on the one hand people could go for a cheaper loan structure for free (how much you can gain with a redemption, I have already written in this article) and on the other hand the new forint loans have almost one to three month interest rates.

Why this is terribly dangerous is something I have already covered

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By the way, it is very typical of Hungarian society that we move through the city, because in hyper hyper it is 50 forint cheaper, but we don’t even care about the really important things. Let’s take $ 2-3 million off our credit while we could switch banks for free. But it is not as important as the sour cream we are willing to drive for 15 kilometers.

I asked Good Finance, a credit expert on the blog, to give you a little market overview, who would want to redeem your loan now, who doesn’t, and what are the loopholes, for example, in overcharged real estate, or is there a solution if you only apply for minimum wage. (Good news: usually there is a solution).

So let her write.

Who is worth redeeming and not having an existing home loan?

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basic Requirements

When replacing an existing loan, it is of paramount importance that the obligor is always paying the loan to be refinanced on time. The extent to which what is still tolerated is different from one bank to another. If you have an overdue debt at the time of applying for a loan or have a payment delay of more than 30 days in the 6 months prior to applying, you may want to first put together a half-year that always pays your installments on time.

If any of the loan applicants are on the negative KHR list (BAR), this is a disqualification for all financial institutions . Slipping for a few days is not a problem at most financial institutions.

In January 2015, in order to prevent over-indebtedness of borrowers, the Central Bank introduced two thresholds that must be taken into account by all financial institutions when granting new loans.

One new indicator is the income-proportionate repayment installment ratio (JTM): the ratio of total repayment installments paid by the borrower and the total amount of their verifiable net income. below $ 500,000 a month JTM cannot be higher than 50% and above $ 500,000 60%.

The other indicator is the loan-to-value ratio (HFM): the mortgage loan demanded / the market value of the hedging property. The maximum of this ratio is 80%.

Many are unaware of this

Many are unaware of this

But the replacement of existing loans is not covered by the above-described regulations.

While most financial institutions have the same expectations as refinancing loans as they do with newly placed funds, there are several banks that have much lighter expectations for debt repayment (unless they require more credit than existing loans).

There is a financial institution where, if the debtor can provide proof of income at least the minimum wage (and he / she has paid / paid off his / her existing loans without delay), he / she can obtain a loan exchange offer on very favorable terms.

The 80% maximum coverage ratio excludes masses of former foreign currency debtors from refinancing their forint loans. Taking advantage of the lighter regulation on loan redemptions, there is a financial institution that does not look at the current coverage ratio, but rather starts with a foreign currency loan at the time of borrowing .

That is, if a person has taken out a foreign currency based loan and the loan amount requested in the forint was not higher than 80% of the real estate value determined during the loan evaluation, it may also replace the loan if the ratio of the higher than 80% due to its evolution.