You are about to submit a mortgage application to the bank to own a house or apartment: here are 10 tips to negotiate your credit and save on the overall cost.
1 – Prepare your project well by saving
Banks particularly like buyers who put a large personal contribution on the table. And even if you do not have big means, the fact that you have spared for several years and bring a small nest egg will be favorable. You can then obtain a more advantageous loan rate.
2 – Calculate your budget
Calculate the monthly payment that you can dedicate to your acquisition. Your debt ratio should not exceed 33% of the income you receive. The bank will also be very attentive on your “rest to live”: the sum that you have left once everything has been paid. In order to calculate your budget, you must add all your income and subtract your incompressible expenses (electricity, water, taxes, credits, insurance …). You will then know the amount of the monthly payment that you can devote to your real estate purchase.
3 – Learn about the aids
Before contacting your bank, find out about the assisted loans to which you are eligible such as, perhaps, the PTZ + (zero rate loan plus) which is a state aid. Your municipality may also offer a complementary zero rate loan or a grant. Try to contact all organizations that can help you (Action Housing, pension fund …).
4 – Play the competition
In terms of financing, your bank will not necessarily be the one that can offer you the best mortgage rate. You must therefore compete with banks and other funding agencies to find the loan at the most attractive rate. Do not hesitate to entrust this mission to a broker.
5 – Study the offers well
Do not just rely on the credit rate. You must also compare all the other components of your loan: early repayment, maturities, cost of insurance, requested guarantee, application fees … In case of subscription of a fixed rate loan, the TEG (rate overall workforce) is a good basis for comparing offers.
6 – Recognize the different formulas
For your mortgage, you can choose between a fixed rate loan and a variable rate loan. In the first case, the rate stays the same throughout the repayment period of your loan. As for the revolving rate credit, the rate varies according to the evolution of the reference rates: it can therefore go up or down. Be careful to check that the credit has security in case of sudden rise.
7 – Require simulations
The bank is required to inform you about the consequences of the options taken for a revisable rate. In her credit offer, she has to join several simulations showing the impact of a sharp rise in rates.
8 – Choosing the right guarantee
The bank can offer you different guarantees: a lien from the lender of money, a mortgage or a deposit by a specialized body. You must choose the one that seems most appropriate. The deposit may cost less, if for example it refunds you at the end of credit a portion of the amount paid on departure. Also, a bond does not involve a notarial deed, nor a mortgage release in case of resale before the end of the repayment.
9 – Do not neglect the loan insurance
A home loan is systematically linked to a loan insurance policy that covers death and disability following an accident or illness: it guarantees repayment of monthly loan payments. Banks always offer the contract of their insurance subsidiary. But nothing forces you to accept it. You can indeed take out your loan insurance with the insurer of your choice. By going through an insurance broker, you may be able to make significant savings on the cost of this insurance.
10 – Calling on a broker
Brokers have the role of looking for the loan at the lowest rate and the best conditions, being the most suitable for your situation. They are often able to access more advantageous terms than those offered by the bank.