No offense to us, banks have not stopped financing real estate projects. Only they are more cautious than in the past, and often look twice before committing themselves. Here are the ten tips from LaVieImmo.com to put the odds on your side:
To avoid any unpleasant surprises, here is a list (not exhaustive) often points not to neglect before presenting your file to a bank or a credit broker.
1) The amount of the contribution
There is no miracle. Banks, which have been able to finance real estate projects up to 100 or even 110% in the past, are now very strict about the financial contribution of the borrower. The latter must contribute at least 10% of the amount he borrows. Most banks consider that the grant should cover the various costs – notary, file and warranty, among others.
2) Professional stability
Contracts of indefinite duration and seniority are the new keys to access to credit. For the liberal professions and artisans, it is recommended to provide two or three years of assessment.
3) Stop at the overdraft!
Before deciding whether or not to grant credit, the bank looks at the financial situation of the borrower. It is therefore advisable to avoid being exposed in the three to six months preceding the application for credit and, as far as possible, to repay its consumer revolving credit. ” If the borrower is irreproachable on this point, it will be easier for him not only to obtain a mortgage but also to negotiate with his bank the terms of the loan, ” says Sandrine Allonier, head of economic studies and spokesperson of the broker Meilleurtaux.com
4) Monitor its debt capacity
This is perhaps the best-known rule for borrowers, the so-called “33%”. The exact rate varies from one bank to another and depending on the records, but as a rule, the amount of the loan must not exceed one-third of the net income of the borrower, summarizes Maël Bernier. And if banks have been able to be flush in the past, the rule is now strictly enforced – ” even for high income, ” says Mael Bernier.
5) Justify regular savings before borrowing
At least as much as the borrower’s income level, he can save that the bank will be sensitive. ” Some banks will prefer to lend to a client who, without necessarily getting a large salary, manages to save money regularly, even little, to another who earns a better life but finds himself discovered on the 15th of every month … “, explains Maël Bernier. It is better to delay a few months his request, the time to improve his managerial skills.
6) … but also after!
Banks are becoming increasingly concerned about the borrower’s level of savings once the credit is granted. The repayment of the monthly payment should not wholly exhaust its ability to save money. Take it into account when preparing your file.
7) Watch out for missing pieces
We should perhaps have started there: according to Ari Bitton, “to give a complete file to his banker or his broker, it is the ba-ba of the demand for mortgage credit.” Presenting yourself with only half of the necessary documents, or sending out your payslips and other account statements over the water will have the gift of annoying your interlocutor – and will make you potentially suspicious in his eyes.
To be sure of not forgetting anything, here is the list of documents to gather. In addition to the sales agreement if it is already signed, each co-borrower must provide:
its last two tax notices;
his previous three payslips;
his recent three bank statements;
proof of identity (CNI, passport);
8) Do not take too much of your time
In the same vein, it is better not to wait too long to look for funding. From the receipt of the sales agreement, the buyer of a good has a period of 45 days to justify the seller to obtain his credit. It is recommended not to waste time.
9) Be careful where you buy
The more dynamic the real estate market is, the more likely you are to sell your property quickly and under suitable conditions. You do not necessarily think about it when you buy, but your bank is very likely to pay attention.
10) Try to lower its borrowing time
The risk taken by the bank increases with the duration of the loan it grants. It can, therefore, be seen to reduce as much as possible the duration of his investment, as much as possible. ” A year or two may be enough. Of the 100 files funded over 25 years, about thirty could be as well on 23 or even 22 years, “said Ari Bitton. A solution was all the more interesting that a slight rate cut could accompany this reduction in duration.