Caught between the attrition rate and higher borrower insurance than for the youngest, many people over 45 are currently experiencing difficulties in getting loans for their property projects. But solutions are still possible to achieve its goals.
Has it become a mission impossible to get a home loan after 45? However, in the prime of life and with substantial income, many borrowers currently experience the worst difficulties in passing on their credit files.
“Due to the current low leeway between credit interest rates and attrition rates, too expensive loan insurance can quickly block a loan,” points out Cécile Roquelaure, director of studies for the broker Empruntis. And we know that his costs vary greatly from one file. to another. Age is the main factor: for a straight profile, a person over 45 can have loaner insurance up to 4 times more expensive than a person aged 30.
What is the wear rate?
The interest rate corresponds to the total effective annual interest rate, which the banks may not lend beyond.
Specifically, it therefore includes interest, guarantee costs, borrower insurance and administration costs.
“And since the cost of money for banks is currently high, they have little room to maneuver and offer high credit rates even to wealthy households,” she continues.
Sometimes unexpected situations
The current situation sometimes presents unexpected situations. “We have occasionally advised customers about‘borrow more to be able to send a file, illustrates Pierre Chapon, co-founder of the broker Pretto. When a borrower has a large payment and requests a smaller amount from the bank, the risk is that the fixed costs weigh more in the calculation of the annual percentage rate and that the loan is blocked.
In any case, if your loan is unattainable due to an attrition rate exceeded by overpriced borrower insurance, several strategies may allow you to reach your goals after all.
What solutions to bypass the wear rate?
The first of these is try to find cheaper insurance. “What is encouraging at the moment is that banks are more flexible. They can agree not to provide borrower insurance and go through a delegation of insurance so that the total effective rate remains within the seams of the borrower’s rate.” Wear, says Pierre Chapon. Sometimes you have to negotiate a little. The borrower can, for example, offer the bank in return to entrust him with his home or car insurance.”
In the event of the banks’ refusal or the impossibility of finding a more competitive borrower’s insurance, Cécile Roquelaure indicates that those who borrow as a couple can request “lower their insurance quotaSpecifically, if this is lowered to 75% and one of the two borrowers dies before the total repayment of the credit, the other will have to continue paying the remaining 25%.
“Also, it must be negotiated with the bank, clarifies Pierre Chapon. The advantage is that it makes it possible to mechanically lower the weight of the borrower’s insurance. And nothing prevents the household from resorting to a welfare fund. which will allow him to be covered 100 %.
The adjustable rate, ally or trap?
Another option that has dropped off the radar for the past ten years but has recently made a comeback is the use of variable interest loans. “They make it possible to obtain credit interest rates at the start that are more attractive than with a conventional loan, explains Pierre Chapon, co-founder of the broker Pretto. In return, this course will be adjusted up or down each year according to for market development.”
Instead of a fixed interest rate of 1.9%, a borrower can obtain an adjustable interest rate of 1.65%, according to the broker. But this can be risky as this rate will follow the market curve.
“You have to be careful with the offers, warns Pierre Chapon. With an interest rate ceiling of 1, the risk is limited, since the credit rate can change by 1% up or down. On the other hand, if an auditable interest rate is limited to 2 o’clock can help a experienced investor, I do not recommend it to unsophisticated borrowers.”
Finally, two final potential solutions are put forward by Cécile Roquelaure. “The multi-line loan makes it possible, for example, to borrow part of the sum over 10 years and the other part over 20 years to bring the annual effective annual interest rate below the wear rate, she explains. Finally, it is also sometimes possible to borrow in the form of a Family SCI. For the latter, the treatment is slightly different than for conventional borrowers. Some brokers offer this option to send difficult files.”