Second-time buyers are often favored by banks
With a serene job situation and a regular cash flow, second-time buyers are often favored by banks. However, who are they? What are the differences with first-time buyers? What credit can they claim? Is the repurchase of credit interesting for these experienced borrowers?
Second-time buyers: who are they?
In France, the appellation secundo acceding allows to designate households (family, single) who buy for the second time their main residence. These are young or senior households who already own their principal residence and buy a second home to live with or without the resale of the first principal residence. In most cases, second-time homebuyers apply for a home loan for the acquisition of a second principal residence. In 2016, they represented more than 20% of borrowers, in particular thanks to particularly attractive loan conditions offered by ultra-low interest rates. According to some recent barometers, the typical profile of a second-time buyer in 2016 was 41 years old with an average income of 5,600 euros net. He had a personal contribution of nearly 55,000 euros if he came from savings and 94,000 euros when he came from savings. Moreover, statistics also show that the acquisition of a second principal residence is often conditioned on the resale of the first residence. 40% of them sold their first property to be eligible for a new real estate project.
What are the differences with first-time buyers?
Considered as the already-owning households embarking for a second time in the process of acquisition of real estate, second-time buyers are very different from first-time buyers. The main difference is often the relationship to money and mortgage. In fact, if first-time homebuyers generally have very little or no personal input, second-time buyers have a significant contribution to acquire a new property (house or apartment), which means a lower credit need than during a first acquisition. Unlike first-time homebuyers, second-time buyers benefit from much more sophisticated borrowing terms with shorter repayment terms and attractive interest rates. In fact, the second purchase often occurs after the passage of the quarantine, the period where the home represents more insurance with the banks thanks to its professional and family stability. To know also that the financing of a second principal residence is done mainly with the aid of a single bank loan, whereas that of the first purchases are the subject of several lines of loans whose financings aided or agreed.
What credits for a second real estate purchase?
With more than 20% of borrowers in 2016, second-hand buyers are becoming more numerous. To capture this experienced and financially stable clientele, some banks have put forward specific credit offers to subscribe another home loan without being strangled by too heavy monthly payments. Financing offers adapted to this borrower profile to take all the same with precaution. Called “buy-resale” or “relay-buyout”, these financing offers make it possible to finance a new real estate purchase while waiting to sell the old one. The principle is as follows: the requested bank buys the current loan (s) of the borrower and combines it with his new loan. To prevent the borrower’s debt ratio from exceeding 33% of net income, the lending institution will provide an advance of approximately 70% of the estimated value of the first asset. If these offers of credits dedicated to second-time buyers can significantly reduce the debt of the borrower compared to a traditional bridge loan, you should know that the final costs of these offers can be very important since they incorporate the remaining capital the first loan or its prepayment penalties. These reputedly expensive credit offers are not suitable for households that do not wish to resell their principal residence.
Is the repurchase of credit interesting for these experienced borrowers?
The repurchase of real estate loan for second-time buyers and different purchase-resale or buy-out, even if these banking operations have certain common points such as the early repayment of the first by the subscription of a new loan or the payment of penalties of prepayment. As a reminder, the loan buyback is to repay outstanding loans to replace them with a new loan at a lower interest rate. For second-time buyers, this banking operation can greatly facilitate the realization of a new acquisition. Rather than taking on more debt, the loan buyback allows second-time homeowners, especially those who do not wish to resell their first principal residence to have a better borrower profile with lighter deadlines to qualify for another loan. real estate credit. This banking operation, different from a bridge loan, can therefore be a real option for a second acquisition to be made in the best conditions. In addition, a secundant homeowner who has opted for a purchase-resale or relay-buyout for their second real estate project can make a credit buyback to have a single monthly payment adapted to their finances and projects.