How to get the best home loan rate: Taking out a property loan is often essential to finance your project of becoming a homeowner. It is valid for the acquisition of a primary or secondary residence. This approach is also necessary in the context of a rental investment.
Credit allows you to pay part or all of the purchase price. All banks offer home loans to their customers. You must therefore take into account many parameters to know where and how to find the best real estate rate.
What is a home loan?
A real estate loan is the sum of money borrowed from the bank to finance the purchase or renovation of real estate. The amount therefore depends on your needs and your solvency with the lending organization.
The real estate rate is generally fixed in France. You pay the same amount each month to repay your mortgage. You also have the option of taking out a flexible loan. In this way, you can increase or decrease the amount of your monthly payments. This alternative is recommended for people with very variable incomes. [How to get the best home loan rate]
Optimize your borrower profile
When you want to take out a home loan at the best rates, it is important to meet all the required criteria. Your banker will study your borrower profile in detail to calculate the amount of the real estate loan that he can grant you.
This criterion also defines the real estate rates that will be granted to you. You must therefore provide all the information that can work in your favor in your loan file. The goal is to guarantee the minimum risk-taking for the bank if it grants you a real estate loan.
Personal contribution
By having a personal contribution, you demonstrate your commitment to making your project a reality. Your banker or mortgage broker will deduce your ability to save from this.
You reduce your financing ratio when the amount of your contribution is high. You can also benefit from better borrowing conditions.
Professional situation
Your professional stability constitutes a considerable asset in obtaining a better rate. You guarantee your bank your ability to pay your monthly payments on time. However, establishments are aware of the precariousness of the job market.
They take this into account when studying each loan application file. Employees on permanent contracts, but also temporary workers or employees on fixed-term contracts can take out a real estate loan.
The same goes for those who have signed a seasonal worker contract. The granting conditions vary depending on each professional situation. [How to get the best home loan rate]
The debt ratio
Your debt ratio must guarantee a balanced budget. It defines the maximum amount you can pay each month. It represents approximately a third of all your income, without exceeding 35%. This way, the money you have left allows you to live decently. You can also pay all your monthly charges.
It is equally important to ensure good management of your income. The real estate loan broker closely examines your banking transactions. A solvent customer has no payment incidents or bank overdrafts. It is also important not to use credit too often to make your purchases.
The real estate purchase project
It is important to know how to find the best real estate rate based on your real estate purchase project. You must put credit institutions in competition, possibly using a real estate loan broker who will take the steps for you. Purchasing property that is easy to resell also tends to reassure banks. [How to get the best home loan rate]
Negotiating your home loan
Many individuals wonder how to find the best real estate rate. Engage in competition by contacting several banks. Obtain details on several offers and choose the one that best meets your needs. Each establishment applies its grant conditions based on the regulations in force.
As part of a customer acquisition strategy, some banks reduce the interest rate. Other structures will prefer to focus on retaining their customers. As a result, the real estate rates offered to new clients will be less competitive.
Competition between banking establishments is essential before applying for a real estate loan. You even have the right to withdraw 10 days after signing the offer. This increases your chances of taking out a loan at the best rate.
During the negotiation phase, you must raise the possibility of early repayment. In this case, the bank informs you of the compensation that you must pay for the amount of your property loan. These have the advantage of being capped. A loan is repaid over several years. T
he bank therefore records a financial loss in the context of an early repayment. It is also possible to request the non-application of this clause when taking out your property loan. This way, you will not pay any additional fees in the event of early repayment.
Negotiation can also relate to processing fees. They pay the bank for the time spent studying your file. She is also there to listen to you, offering you support and a tailor-made offer. The costs relating to the processing of your file are negotiable.
When taking out a property loan, you must also take out borrower insurance. Your banker will sell you the offers of the companies with which it has a partnership contract. However, you are free to choose the loan insurance that suits you. [How to get the best home loan rate]
How is a real estate loan rate calculated?
Many parameters are taken into account to calculate the real estate loan rate. This concerns application fees, insurance, and loan interest. Fixed or variable, the bank’s interest rate corresponds to the cost of the loan.
It depends on your borrower profile, the granting conditions, and the duration of the property loan. Borrower insurance is mandatory when you take out a home loan. It guarantees the payment of monthly payments in the event of health concerns.
The bank may also require a deposit. This measure allows the establishment to receive a refund if you have financial problems.
Is it possible to get a home loan without a down payment?
Theoretically, individuals can borrow from the bank without personal contribution. However, the reality is different. Lending organizations very rarely grant credit without a down payment. The loan amount is also low. The borrower must have a strong borrowing capacity.
Its eligibility for aid schemes (for example the 0% rate loan ) also constitutes a significant asset to take into consideration. As a result, the financing obtained can be used as a personal contribution. Do not hesitate to use a simulator to find out the amount that can be granted to you depending on the repayment period. [How to get the best home loan rate]
How CV&Habitat can help you obtain better real estate rates?
C&V Habitat is a developer-builder of houses in Savoie and Haute-Savoie, with more than ten years of experience. Our team is here to listen to you, allowing you to benefit from tailor-made advice.
Knowing many financial organizations and real estate loan brokers, we can also help you choose the best credit offers. These will allow you to acquire off-plan accommodation in one of our new programs currently being marketed.
Read also: Everything You Need to Know About Home Loan Rates: Tips for Saving Money