Can you take out a mortgage without having finished paying off your consumer loan?
It may happen that one needs to take out real estate, to become an owner. However, is this possible since you still have to repay your consumer credit? We tell you everything.
A question of timing
You should not forget that one is a medium term loan and the other will commit you to years of repayment. Taking out a mortgage should not be a problem, since the consumer loan will be reimbursed quickly enough, you will only have the mortgage to repay.
However, it is not always easy to keep track of finances when you have to repay two different credits, on different dates in the month.
Is it possible to combine consumer credit and mortgage loan?
In principle, nothing prevents you from taking out a mortgage, even if you have not yet finished paying off your consumer credit.
The only parameter on which the banks rely on whether or not to grant you additional credit is your debt ratio.
If your outstanding loans already reach or exceed 33% of your income, it is practically impossible to find a bank to finance your mortgage.
Not only will your over-indebtedness greatly affect your purchasing power, but it will also affect your ability to repay.
Can we “drag” consumer credit into mortgage?
Many people wonder if it is possible to include a consumer loan in a mortgage. The reimbursement will then be made under the conditions of the mortgage.
However, the problem arises at the level of the loan contract. This must be based on the foundations of a consumer credit or a mortgage, and not both. This is the reason why banks are very rare to accept this type of arrangement.
Credit consolidation, a possible option
If you want to have consumer credit and mortgage in one single contract, you can take out both and later consolidate credit.
This operation consists of redeeming all your current credits and redefining the terms of a new contract. The repayment term will then be extended, the final cost of the credit will be increased, but the monthly payments will be reduced so as not to penalize your purchasing power.