Present yourself under the best possible “borrower profile”.
Not all borrowers are equal when it comes to mortgage loans. Financial institutions assess the risk associated with a loan on a case-by-case basis. The applicant’s professional situation is the first criterion taken into account. Your work contract (CDI, fixed-term contract, etc.), your status (manager, employee, etc.), your seniority, your age, your opportunities for professional development are all elements taken into account.
Another important criterion: your debt ratio. The bank will not take the risk of lending you money if your expenses make up more than a third of your income. Above all, this rate will determine the size of the loan that the bank is ready to grant you. In fact, in practice, the monthly installments may not exceed 35% of the borrower’s income, including borrower’s insurance. But to refine its offer, the bank also calculates the amount of your “remain to live”, that is, the amount you have left after paying your monthly loan payment. The higher it gets, the better your chances, even if the debt ratio must exceed 35%.
It is also an advantage to have good personal input. Banks rarely grant home loans without a contribution. In practice, the contribution must amount to at least 10% of the total financing of your purchase. Having a larger deposit will often get you a better deal. Finally, the bank will check your bank history with your most recent bank statements. The absence of overdraft, payment event, consumer credit will allow you to negotiate your mortgage application as well as possible.
Compete to get the best loan
To get the most interesting loan offer, do not hesitate to search several banks. The reflex is of course to go to your own bank. You know your adviser and he or she knows your case. However, it is important to consult several financial institutions. Each of them may have a different mortgage policy. Competition may give you better terms or additional benefits. The European standardized information sheet (Fise), which is provided by each loan institution, allows you to easily compare offers. Everything is negotiated: the interest rate, application fees, penalties in case of early repayment, the cost of bank guarantees…
You can avoid these sometimes time-consuming procedures by contacting a mortgage broker. He negotiates on your behalf and takes every step to obtain the best terms. In addition, it can benefit from interesting benefits because it introduces many customers to financial institutions. However, check the amount and terms of his remuneration before committing.
Choose your own loan insurance
To guarantee repayment of the mortgage, the bank may require you to take out death and disability insurance. Here again, it is not recommended to accept the bank’s offer without first obtaining offers from other companies. The bank offers group insurance, which is generally more expensive than individual insurance.
Do not hesitate to delegate your borrower’s insurance. To be accepted by the lending institution, the chosen insurance must offer guarantees that are at least equivalent to its own. Since 1 September 2022, the borrower can cancel his borrower’s insurance at any time in order to take out another that offers the same guarantees. This option is open to all current credits.