Home ownership: A dream within reach

Don't spread yourself too thin

To avoid wasting time and energy, start by clearly defining what you want. That's the basis of everything.
Do you want to buy an old property (even if it needs some work) or do you prefer new? Of course, this is a question of personal taste, but not the only one. The budget, to mention just one aspect, will not be the same. With a new-build property, you'll have a "made-to-measure" home just as you imagine it, with all the guarantees of comfort and compliance with the latest building standards. But at a higher price.
Perhaps you also intend to build your own home? This option is also worth considering if you're not in too much of a hurry. You'll need to find a plot of land, obtain planning permission and find a builder...
Older homes can be potentially interesting, especially as they are often much less expensive than new ones. And if work is required, there are a number of grants available to help you make ends meet.
Another question to ask yourself before starting your search: house or apartment? It all depends on your lifestyle, the composition of your family... and your budget. With an apartment, you'll have to share the condo fees with your neighbors, whereas with a single-family home, you'll have to pay the fees yourself. You're not dependent on your neighbors.

Your personal situation: another criterion that counts
Your choice should also be guided by your family and professional situation. Is your family going to grow or not? (It's a good idea to plan ahead to determine the surface area you need and the number of bedrooms, among other things). Are you sure you won't be transferred and have to sell your home? (A property purchase is only really worthwhile if you stay in it for a few years. The first few years of repayment mainly concern interest, not capital...).

Calculate your financial means

It's great to have a clear idea of your project! But you still need to be able to put it into practice, and have the budget to back it up. There's no point running to your banker without a minimum of preparation. Quietly, at home, start by drawing up a table with an expenses column (current credit...) and an income column (salaries, investment income...). Take the opportunity to take stock of your personal contribution and any assistance you may be entitled to (your parents' loan entitlement, PTZ, action logement loan, social accession loan, rental accession loan, etc.). This will help you see things a little more clearly and give you a better idea of your borrowing capacity, i.e. the amount you'll be able to devote each month to repaying your loan. Ideally, your debt ratio should not exceed 30% of your monthly income.

The important thing is your downpayment

The larger your downpayment, the better the financial terms your bank will grant you. This little "plus" reduces your savings effort and reassures your banker. The greater the amount you have at your disposal, before taking out a loan, the better the terms your bank will offer you. Banks generally require at least 10% of the transaction to be financed by equity.
But this is often not the case for first-time buyers, who have little or no personal capital to contribute. But that doesn't mean all is lost! The bank will require more guarantees, and in particular will analyze the sustainability of your income (job tenure, job security...), your "financial behavior and the way you manage your budget (absence of overdraft...).

Find the right loan and the right bank

Your first instinct will be to contact the bank that manages your current accounts. While this is a good idea, it may not be the bank that offers you the best loan proposals. Don't hesitate to consult other establishments and play the competition! And above all, have simulations drawn up for the different types of loan you'll be offered. Not all existing loan formulas are suited to your situation. Before choosing yours, take the time to consider two key points:

- the type of rate: fixed or variable. It's up to you to decide according to your "personality". If you're the type who prefers security and wants to know where you're going, a fixed-rate loan will suit you perfectly. There are no surprises. As soon as you sign the loan, you'll know the applicable rate, which won't change until the end of the loan. With a variable-rate loan, the interest rate is revised periodically, usually every year on the anniversary date of the loan, according to changes in a reference index. To limit the risks associated with rising interest rates, opt for a "capped" variable-rate loan, which cannot vary beyond a certain limit;

- the term of the loan. How long do you plan to commit yourself? The answer essentially depends on your personal contribution, the amount borrowed and your repayment capacity.

If you don't have enough time to shop around, you can benefit from the expertise of mortgage brokers. They'll take care of everything! It's very convenient and saves you a lot of time. They'll shop around for you, comparing rates and terms, and can even negotiate the cost of loan insurance and guarantees.

Essential insurance

No loan without insurance. It's an essential component of your mortgage, and one you'll need to factor into your calculations, as its cost is not insignificant. It provides you with guarantees in the event of default on your mortgage payments. Loan insurance includes several types of coverage:

- death/total and irreversible loss of autonomy. In both cases, the insurer will reimburse the bank for the outstanding capital. Death cover is generally limited in duration, expiring at age 70, 75, 80 or over, depending on the contract;

- temporary, partial or total disability/incapacity to work due to accident or illness. This cover is subject to a deductible period and no longer applies to people over a certain age, or on retirement, when the loan repayment is taken over during this period;

- job loss insurance. This optional insurance will temporarily cover the repayment of your monthly loan instalments in the event of unemployment.

Marie-Christine MENOIRE