To offer you the accommodation of your dreams, you will surely go through the “loan” box. But before embarking on this project, it is essential to consider certain elements. Discover the borrower’s guide.
The APR (Global Effective Annual Rate) is a benchmark index that allows you to compare mortgage offers and determine the best ones. It is defined by the lending organizations and its value cannot exceed the legal limit (or rate of wear) authorized in France.
The APR includes not only the nominal interest rate, but also insurance premiums and various commissions and fees (application or registration fees, for example).
It is necessary to know the wear rate (or wear threshold) before applying for a loan from a bank. This rate is set and published each quarter by the Banque de France, in order to protect consumers from abuse by certain credit institutions.
If a bank offers loans whose APR exceeds the limit set by the usury rate, it would be liable to penalties.
As its name suggests, fixed rate credit is a loan whose value always remains the same. Unless the contract is renegotiated, the monthly payments, the repayment term, the cost of credit and the interest rate are established at the signing and will not change.
Variable or revisable rate credit is a loan whose value changes over time. The terms are gradually adjusted, and sometimes the repayment period.
Everyone knows it: banks particularly appreciate civil servants and employees on permanent contracts. As they are protected by their employment contracts, the risk of a drop in their income is low.
Although their salaries are unstable, the self-employed and self-employed can also benefit from a mortgage. How ? For example, by highlighting their strengths, finding guarantees or smoothing their income.
Criteria such as place of residence, nationality, age, etc. have an influence on the conditions for acquiring a mortgage.
If a non-resident wishes to benefit from a loan in France, the situation will be very complicated. Indeed, it represents a potential risk for banks.
EU nationals do not face any difficulties in obtaining the loan. If they have a residence permit and provide certain additional supporting documents, non-EU foreigners can also submit their files.
Home loans are more easily granted to young applicants than to seniors.
The personal contribution improves the chances of granting a mortgage. Indeed, it is considered a guarantee of seriousness and shows that the applicant has good management of his accounts. It can come from investments, salary, personal savings, …
A few months before applying for a loan, it is advisable to clean up the accounts. This consists, for example, in setting up savings, avoiding bank overdrafts, adopting a reasonable lifestyle, etc.
The debt ratio represents the share of income allocated monthly to the repayment of the mortgage. Thanks to him, the bank ensures the compatibility between the standard of living of the applicant and the loan.
While it was once set at 33%, the debt ratio is now 35% (and has been since January 2021). It is calculated as follows:
As long as you follow all the advice mentioned above, you will optimize your file. To put the odds on your side, it is advisable to clean up your accounts, provide a personal contribution and limit your debt ratio to 35%.