When you take out a mortgage loan, many banks will also ask you to repatriate your current account to them. In other words, you will have to change bank, which of course is never pleasant. How to avoid such a situation?
Credit broker Credishop recently conducted a survey on the expectations of applicants for a home loan. One of the questions related to the relocation of the current account and gave rise to mixed responses. Does it really matter? After all, it’s just a current account, right? Well yes, it is important! Read on in this regard and you will see that moving a current account is not an easy task.
Why such a request from the bank?
Every bank naturally tries to make money and will therefore have every interest in you remaining a customer as long as possible and subscribing to it as many products as possible. This is why the bank will always ask you to repatriate your current account with it if you want to take out a mortgage loan so that all your payment transactions go through it, that you have your payment and credit cards at home, etc. All this will, of course, be accompanied by costs for you and therefore income for the bank. Changing current accounts is also not necessarily something that is done frequently and the bank will therefore have the relative certainty that you will remain a customer with it for a while …
Having to move your current account leaves you a priori relatively indifferent? Be aware that a change of bank will nevertheless have important consequences, such as having to modify, for example, all your direct debits, your standing orders, etc. So many administrative formalities that you would gladly do without. Think about payments that do not arrive, or too late, formal notices, stress.
Other insurances accompany (obligatorily) your mortgage loan
This will go further than just your current account. In addition to your current account, the bank will also often ask you, as part of the application for a housing loan, to take out your fire insurance and / or outstanding balance with it. In exchange, it will then grant you a conditional reduction (!) On the rate of your loan. A great deal a priori since you will get a reduction on your loan when you need these fire insurance and outstanding balance anyway. After all, whether it’s with the bank or another insurer, what does that change?
Well, think again! You could indeed get a very bad deal. Why ?
- Are you not paying too much for these insurances? It will be important to compare well before the premiums that you will pay to the bank for your fire insurance and the remaining balance due to offers from other insurers. This will tell you if you are not paying too much to the bank. And if this is the case, the benefit of your reduction on your mortgage will quickly be erased by the higher cost of your fire insurance and / or outstanding balance.
- You will put your back to the wall yourself: if you decide after a certain time to move your current account or your insurance (fire, outstanding balance) with another bank or another insurer, then you will also lose the benefit of this reduction!
Coupled sale prohibited, grouped sale permitted
As a professional loan broker, we believe that the legislator has missed the opportunity to finally put an end to the practice of coupled sales in the field of home loans. We understand that a credit organization wants to sell several products. We also understand that you want a discount as a customer. But we must also take into account the reality. Imagine walking into a traditional bank and asking for mortgage terms. Very quickly, it will offer you all kinds of additional products that you will not have requested. You will be psychologically influenced:to buy a house or refinance your existing loan at a better rate, you will need to take additional products (often more expensive). Otherwise, it will not be possible …
This is neither fair nor correct, resulting in a total lack of freedom of choice. If you want this additional reduction, you must take out this additional insurance (outstanding balance) from the bank. And this is precisely where the missed opportunity lies. We have no problem with the importance of insuring you against the death of your partner and even taking out other possible guarantees through outstanding balance insurance. But it should be possible to get a reduction on your home loan without having to take out outstanding balance insurance with the same bank.
This is why Hypothèque advocates in this case the total freedom of the customer, without obligation to take out outstanding balance insurance. We leave you free and respect your choice. We will of course always inform you about the consequences, but you will retain your complete freedom.
How to keep your freedom when taking out your mortgage?
However, do you think that it is not wise to change banks for your home loan? The most important question will then arise: how to obtain a loan despite everything without having to take additional products (current account, fire insurance and outstanding balance)? In this case, there is a very simple solution: an independent loan broker. This will compare the offer of different loan organizations for you and seek the best possible credit solution. Regarding any additional products and your current account, you will remain completely free. So nothing will force you to change banks and you can take out insurance wherever you want.
Make an appointment without further delay with the nearest Mortgage agency. There are many other advantages to having an independent credit broker.
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