Buyouts, renegotiation, bridging loans · Guide
Debt consolidation with a mortgage: applicable regime, true cost and alternatives
Consolidating a mortgage and consumer loans: the applicable regime, the true total cost, and the lighter solutions to try first.
Consolidating a mortgage and consumer loans results in a single contract, the regime of which cannot be split: the entire operation falls under mortgage credit, or entirely under consumer credit, depending on the proportion of mortgage loans; a guarantee taken out on a property triggers the mortgage regime. The monthly instalment decreases because the term is extended, and the total cost increases.
By Sandy MASCART, mandataire d'intermédiaire en opérations de banque et en services de paiement ORIAS 26000541 sous le mandat de CDV PATRIMOINE & ASSURANCE (ORIAS 14005573)
Key points
- Debt consolidation is not a mortgage refinancing: the register of intermediaries distinguishes two separate types of operation.
- The regime cannot be split: the entire operation falls under mortgage credit, or the entire operation falls under consumer credit.
- A guarantee taken out on a property triggers the mortgage credit regime, regardless of the composition of the operation.
- An information document must be provided before signature, including the economic assessment of the operation and a point-by-point warning.
- A monthly instalment that decreases due to an extension of the term costs more in total, and the comparison of instalments is regulated in advertising.
Combining a mortgage and consumer loans into a single instalment is a debt consolidation. Here is the applicable regime, the true cost, and lighter solutions, as a complement to loan refinancing and bridge loans.
Debt consolidation does not currently fall within the scope of Sandy MASCART’s mandate, which covers mortgages. To proceed, please contact your bank or an intermediary registered for this operation: the ORIAS register allows you to verify this.
What is a consolidation that combines a mortgage and consumer loans?
A single loan, with a new lender, that repays several debts: one contract, one instalment. A mortgage refinancing only takes over one mortgage.
| Mortgage refinancing | Debt consolidation | |
|---|---|---|
| What is taken over | A mortgage | Several debts of different natures |
| What changes for you | The rate, sometimes the term | The entire structure of your indebtedness |
| Number of lenders to be settled | One | As many as there are lines taken over |
| Security | Taken over or replaced | Often taken or reinforced on the property |
| Applicable regime | Mortgage credit | That designated by the routing, see below |
The classic refinancing: its steps.
The regime of the operation determines your rights
Beyond a property share fixed by decree, everything falls under mortgage credit; below that, under consumer credit. A property security decides in place of the threshold.
60,00 % ()The share includes interest, fees and early repayment penalties, not just the principal.
Le texte vise l'hypothèque, toute autre sûreté comparable sur un bien immobilier à usage d'habitation, et tout droit lié à un tel bien. Il s'applique « quel que soit l'objet » de l'opération : un regroupement composé de seuls crédits à la consommation, mais garanti sur le logement, relève du régime du crédit immobilier.
- En vigueur depuis le
- Source
- Article L. 314-12 du code de la consommation — Légifrance
Please ask: what security are you taking, and under which regime are you issuing the offer? The cooling-off period and early repayment depend on this. The boundaries between operations: the scope.
The information document: request it before signing
As soon as an existing loan is taken over, the lender must draw up a written document with you that itemises the transaction line by line, at the latest with the pre-contractual information sheet.
2 ()It details each loan (outstanding capital, compensation, notice period), your other debts, the date on which your direct debits will stop, and an economic assessment stating whether the term or the cost increases.
Ils couvrent notamment : continuer à payer les échéances et les cotisations d'assurance des crédits repris jusqu'à leur remboursement effectif ; la perte des cautionnements et des assurances attachés aux crédits soldés, prises en charge en cours comprises ; le risque de moindres garanties sur une nouvelle assurance, avec de nouveaux délais de carence et de nouvelles franchises ; l'information du co-emprunteur ; la perte de la garantie du vendeur sur les crédits affectés ; la disparition des services accessoires et avantages commerciaux liés aux crédits repris.
- En vigueur depuis le
- Source
- Article R. 314-20 du code de la consommation — Légifrance
The lender must request your contracts; if it relies on your declarations, it must state this in writing.
Loan consolidation: why does the instalment fall when the total cost rises?
Short-term loans aligned with the longest one: the instalment falls, the total rises with the term.
Lorsqu'une publicité compare le montant des échéances d'un ou plusieurs crédits antérieurs à celui d'une échéance issue d'un regroupement, elle doit mentionner de manière claire et apparente la somme des coûts totaux des crédits antérieurs, d'une part, et le coût total du crédit postérieur à l'opération, d'autre part.
- En vigueur depuis le
- Source
- Article L. 312-10 du code de la consommation — Légifrance
Compare three lines:
- The new term, compared with the longest of your current loans.
- The remaining total costs of your current loans.
- The proposed total cost, including fees, guarantee, insurance and intermediary.
If the third exceeds the second, the difference is the price of the lower instalment.
What exiting previous loans costs
Each line follows its own regime: a double cap for property, a cap on the capital for consumer credit, and none for a revolving credit.
Le texte exonère également l'autorisation de découvert et le remboursement effectué en exécution d'un contrat d'assurance garantissant le crédit. Une réserve d'argent soldée dans un regroupement n'a donc, en principe, aucune indemnité à supporter : la compter coûte cher et ne repose sur rien.
- En vigueur depuis le
- Source
- Article L. 312-34 du code de la consommation — Légifrance
Changement du lieu d'activité professionnelle, décès, cessation forcée d'activité : les trois cas sont subordonnés à la vente du bien immobilier, que la phrase du texte place avant eux. Un regroupement ne vend rien, donc aucun des trois ne s'y applique — contrairement à ce que répètent beaucoup de pages du secteur.
- En vigueur depuis le
- Source
- Article L. 313-48 du code de la consommation — Légifrance
The property indemnity is due only if the contract provides for it, and the lender calculates it free of charge upon request: early repayment. The guarantee weighs the most: the release of the guarantee, the returned surety.
Four lighter solutions to try first
Pay off the shortest loan, smooth out the instalments, renegotiate the sole property loan, change insurance.
| Situation | The lightest solution | Where the topic is covered |
|---|---|---|
| A short-term loan weighs heavily on the budget | Pay it off, if the cash flow allows | Paying off a car loan or a lease |
| Several loans from the same transaction create steps | A smoothed plan, or a modulation clause | Loan smoothing |
| The property loan carries a high interest rate | A renegotiation, then a buyout | The profitability calculation |
| The borrower insurance weighs more than the interest rate | Change it, keeping the loan unchanged | Changing borrower insurance |
| A cash reserve is constantly turning over | Cancel it rather than group it | See the following point |
A revolving credit taken over in full? Request its cancellation by signed letter: otherwise, the reserve remains open and refills again.
When grouping is a bad idea
When it destroys an advantage, places ordinary debt on your home, or treats a budget problem with duration.
- A subsidised loan (PTZ, employer loan, housing savings loan) is included in the structure.
- The property loan is at a low interest rate and is advanced.
- The consumer credits are about to end.
- A guarantee on the home is requested for debts that did not have one.
- The new insurance protects less: new waiting periods, lost coverage.
- Missed payments are already established: grouping does not erase them. First free recourse: ABE Info Service.
Continue paying the credits to be grouped until their actual repayment.
Who handles this type of transaction
The lender, or a registered intermediary for credit consolidation: on the register, this is a distinct nature from residential mortgage lending.
Le code monétaire et financier autorise les intermédiaires en opérations de banque et en services de paiement à fournir un service de conseil sur les contrats de crédit immobilier, à l'exclusion des opérations de regroupement de crédits. Un professionnel qui vous annonce une « recommandation personnalisée » sur un regroupement vous promet un service que le texte exclut.
- En vigueur depuis le
- Source
- Article L. 519-1-1 du code monétaire et financier — Légifrance
- Name your transaction: the scope.
- Verify the registration: orias.fr.
- Ask your bank, free of charge.
- Request the information document before signing.
Your subject is in fact an existing residential mortgage — having it taken over elsewhere, renegotiating it, changing the insurance? That falls within the scope of Sandy MASCART, an agent for banking operations and payment services, who decides on no grant and receives no funds. The full calculation: the article on renegotiation and buy-back; the fees, item by item: the fees page. To know which box you fall into, with the last amortisation table of the residential mortgage in front of you, make an assessment by telephone: if your subject is the residential mortgage, the study can begin; if it is a consolidation, the four steps above are the procedure to follow.
Regroupement de crédits
Un regroupement de crédits dont la part des crédits immobiliers ne dépasse pas 60 % du montant total de l’opération relève du crédit à la consommation (C. consom., art. L. 314-10, L. 314-11 et R. 314-18). Le code impose alors la mention suivante sur sa publicité :
Un crédit vous engage et doit être remboursé. Vérifiez vos capacités de remboursement avant de vous engager
Sources
- Légifrance — Article L. 314-11 du code de la consommation
- Article L. 314-12 du code de la consommation — Légifrance
- Article R. 314-18 du code de la consommation — Légifrance
- Article R. 314-19 du code de la consommation — Légifrance
- Article R. 314-20 du code de la consommation — Légifrance
- Légifrance — Article R. 314-21 du code de la consommation
- Article L. 312-10 du code de la consommation — Légifrance
- Article L. 313-47 du code de la consommation — Légifrance
- Article L. 313-48 du code de la consommation — Légifrance
- Article L. 312-34 du code de la consommation — Légifrance
- Article L. 519-1-1 du code monétaire et financier — Légifrance
- abe-infoservice.fr
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