Deadline modulation is a rather barbaric name for a simple and practical operation! It is a possibility given to people with a mortgage. You can adjust the maturities up or down . Or more simply increase or decrease your monthly payments some months. This flexibility in the credit is an opportunity in case of financial difficulties, variations in your income, or rental investment … Know that this option is valid for all loans !
Modulation of maturity, how does it work?
For clarity, let’s distinguish the two possible operations: adjust the maturity up or down.
Modulation of maturity on the rise
Generally, you will not increase your monthly payment to please your banker … but rather to take into account an increase in your income . This is not mandatory: you can choose to use additional income otherwise, such as to save or increase your current expenses, to please you.
So why make that choice? Smile, there is good news: it will allow you to reduce the cost of credit! Let’s follow the reasoning: if you increase your monthly payment you will repay more capital on your loan each month. And if you repay more capital, your loan will be paid back faster. This operation is therefore in your interest (if you have the opportunity) and … the sooner in the life of your credit will be the better!
With this trick, you can benefit from a loan over a long period (eg 25 years), then increase the monthly payment to reduce the loan and have a slightly higher debt. This operation is even more interesting if your income includes a variable not taken into account in the calculation of your resources. The bank tends to be quite rigid about the indebtedness in the initial proposal but it will be more flexible when the loan is put in place.