The well-known reunifications of loans and debts are financial operations that have their origin in situations in which a family must face monthly payments of different loans that all together exceed their income and it is impossible for them to repay; By grouping all the debts in a single loan with a mortgage guarantee (property), you can extend the repayment period of the total new debt and pay a single monthly installment, which allows you to face a monthly repayment installment that is substantially less than the sum of previous loan installments.
All this is clear, from the base that we have a property to be able to mortgage Or that if we have it mortgaged, we can extend said mortgage. If it is not one of the indicated cases, this operation is no longer possible.
Logically, this supposes a series of important expenses such as cancellation commissions and openings of the different loans, registration of deeds, notaries,…, even having to contract new products in the entity that grants the reunification. For this reason, it is important to know when it really makes sense or when it is worthwhile to resort to this refinancing.
Two must be premises that must be met to decide to refinance debt with a mortgage basis:
- That the problem that makes us unable to meet the monthly loan payments is circumstantial.
- That the reunification that we carry out of the debt gives us a monthly installment to repay that we can comfortably assume and with a certain margin of slack.
And they are still two logical questions.
If we cannot punctually repay the monthly payment of the card, the monthly payment of the car loan or something similar, because in that month we have had to make a disbursement in an extraordinary expense that has upset our day-to-day accounts, It seems that putting a mortgage guarantee (with the expense and paperwork that this entails) would not be the best solution. We must be sure that in a couple of months we can face these returns and regularize our situation through the income that we are having.
Now, when the problem of not assuming the repayment of debts goes further, that is, it is due, for example, to a decrease in income (because someone in the family has become unemployed, for example), which is not circumstantial and that, unfortunately, we do not have an answer as to when we can solve it, we must get rid of the problem as soon as possible without having to get refunds of installments, non-payments or embargoes, because from there it is a circle from which it is difficult to get out.
To find out if reunification with a mortgage guarantee is convenient for us or not, we must analyze in a horizon of at least 5 years what our life and our source of income can be and see if we can maintain the repayment of our debts. The faster we analyze it, the better to avoid upsets and increases in debt. But we must always do it from a realistic position, because it is of little use to deceive ourselves.
We are already at the point where we are aware that our economy has changed for the worse and we do not know when it will improve, which means that we must rethink everything in the medium and long term without delay.
We get to the second point indicated and that is to request a reunification loan that allows us to pay a lower monthly installment than what we had to pay now for all the loans. It is of little use to reunify the debt if the installment that we pay each month, even if it is less than the sum of the installments of the previous loans, we cannot assume either. It is minimizing the problem but not giving it a solution. And since we are incurring important expenses, at least if they solve the situation.
It is, probably, the most important point that we have to see to know if the reunification of debt with mortgage guarantee compensates us or not: we must know what is the maximum monthly payment that we can assume with our new source of income and request a loan in based on it
That is, let’s imagine that we pay 1,000 euros a month from different loans because we received 2,000 and we have seen these reduced by half. We may think that the normal thing would be to request a loan with a mortgage guarantee that would make us pay 500 euros per month (half of what we had to pay before). And this can be a mistake. We must look at the medium and long term and, without being negative, we must be realistic. If it is possible that we still have a reduction in our monthly income, we must take it into account at this time and it may be best to go to an entity and indicate that the maximum we can pay per month is 350 or 400 euros.
What we are looking for with this operation is to solve the problem and give us a cushion or breathing space, with which it is advisable that, since we have to mortgage a property, that it be to get us out of the problem and give us financial relief. If we are going to mortgage something to continue drowning in the same way, we are doing something wrong.
Reunifying debts makes sense when we really get a release. To change one financial burden for another, we do not believe that it is the best solution.