Even if the conditions for granting home loans have tightened somewhat, now is still the time to make an appointment with your banker to borrow.
A meticulous financing plan
First impressions are often the right ones, so don't hesitate to arrive at your meeting with a draft of your financing plan. This is a kind of audit of your financial situation. The banker makes a rational analysis in relation to your real estate project. This document, often drawn up in the form of a table, presents all your financial needs in relation to your real estate project and, on the other hand, all your available financial resources. It is on this basis that you will define your property loan requirements and your debt capacity. Your mortgage will be calculated on the basis of your financing plan. It's an essential element that must be drawn up with precision. Plan ahead, and bring the documents you're bound to be asked for, such as
- identity papers for each borrower,
- family record book (for couples) or a sworn statement for cohabitants,
- proof of address,
- rental agreement with receipts if applying for a zero-rate loan,
- the last 2 tax returns,
- last 3 pay slips,
- bank statements for the last 3 months,
- proof of any outstanding mortgages or personal loans,
- proof of personal contribution.
Use the competition
Interest rates are currently very attractive, but that doesn't mean you shouldn't shop around. Why not consult a broker? He'll find you the best loan on the market. Compare offers and make several simulations.
A limited debt ratio
A new mortgage can be better negotiated if you don't have too much debt. Banks measure your ability to repay the monthly instalments and avoid over-indebtedness. Of course, there is a threshold that must not be exceeded, namely 33% debt-to-income ratio. The Haut Conseil de Stabilité Financière has called on banks to be more vigilant when granting home loans to individuals. These recommendations, designed to prevent household over-indebtedness, could become an obligation.
How long is the loan?
This essentially depends on your personal contribution, the amount borrowed and your repayment capacity. Today, even if loan terms are tending to lengthen, banks should avoid granting home loans of more than 25 years.
A personal contribution
The greater your downpayment , the better the financial terms your bank will grant you. This little "plus" allows you to reduce your savings and reassures your banker. The ball is in your court when it comes to negotiating your loan! Generally speaking, banks require that at least 10% of the transaction be financed by equity. Obviously, if you have 20% or even 30%, your banker will appreciate you all the more! Your "profile" must inspire confidence.
Negotiated loan insurance
If loan insurance is compulsory, you are free to choose your contract. Since the Lagarde Act (2008), the Hamon Act (2014) and the Bourquin Amendment of January 2018, insurance delegation has become increasingly popular. This option gives you greater latitude in choosing your insurer. You are not obliged to opt for the group contract proposed by the bank granting you the loan. Remember that to determine the insurance premium, which accounts for 25-30% of the total cost of a mortgage, the contract takes into account three key criteria: the borrower's age, current and past state of health, and the amount of credit borrowed. So it's a good idea to negotiate and compare your loan insurance to reduce the cost of your mortgage.
Stéphanie SWIKLINSKI