Bankers may be wooed by low interest rates, but borrowers shouldn't let themselves be charmed without discussion... They can put forward a few key arguments to present a good case.
In front of your banker's three-piece suit, it's in your best interest to present yourself in your best light! With accounts that are well managed, attractive investments and a real estate project that's sure to turn heads, you'll have every chance of attracting the bank advisor's full attention.
Asset no. 1
Good management
The key to a good borrower profile is good management. The bank appreciates good account management and customers who do not systematically overdraw. In addition to this day-to-day management, the ability to save is also rewarded. PEL (Plan d'Epargne Logement) savings plans allow you to save up and build up capital through monthly scheduled payments. To benefit fully from the advantages of a PEL, it must be held for 4 years. If you don't, your interest rate is maintained, but your rights to loans and bonuses are reduced. To be on the safe side, you should not only invest in this savings account, but also in a Livret A or a Compte Epargne Logement, which provide you with savings available at any time.
RATES CONTINUE TO DROP
The fall in mortgage rates that began in March 2019 is continuing. The average gross rate - excluding insurance across all terms - stood at 1.39% at the end of March 2019, according to the Observatoire Crédit Logement/CSA, compared with 1.44% in February.
Asset no. 2
Prudent borrowing
A new mortgage can be negotiated all the better if the customer is not too heavily in debt. This is because the bank measures the borrower's ability to repay the monthly instalments and avoid over-indebtedness. Of course, there is a threshold that must not be exceeded, with a debt-to-income ratio of 33%. But this applies to all income levels, even the most modest. It's important to be cautious about the amount you have left to live on, i.e. your disposable income after you've paid all your expenses and monthly mortgage payments. You don't want an acquisition to be accompanied by too many hardships in your daily life. In today's banking climate, it's better to borrow over a longer term, thereby reducing the amount you have to repay each month. It should also be pointed out that excessive use of consumer credit is not necessarily viewed favorably by bankers. It's best not to take out a consumer loan at the same time as a mortgage.
Asset no. 3
A well-thought-out project
Acceptance of a loan also depends on a well-defined real estate project. The geographical location of the property, its characteristics, its price... all parameters that influence the value of the property. In the event of resale, the property must be easy to renegotiate and, ideally, generate a capital gain. If the bank considers that the purchase is not a good investment, it may limit the credit tap or even refuse to finance the property. But by consulting a notary beforehand, or by using his negotiation service to buy, the main risks of making a bad deal will be avoided.
Asset n°4
Rewarding loyalty
As with any merchant, it's a good idea to show your loyalty to your bank. All your years as a customer will be rewarded, and will be used to obtain the most attractive rate, negotiate application fees or reduce the cost of the guarantee. Remember that the interest rate alone is not enough to judge the competitiveness of a commercial proposal: you need to calculate the cost of credit to know exactly how much the financing will cost.
Christophe Raffaillac