With mortgage rates at the lowest, at 1.13% on average for October 2019 (CSA / Housing), first-time buyers are more and more likely to want to invest in stone. Some tips to put into practice to borrow at the best conditions.
Define your borrowing capacity
According to a study by Harris Interactive carried out for the Council of Notaries, first-time buyers are buying their property increasingly young. The average age to become a homeowner has dropped from 38 to 32.
With falling interest rates; banks are indeed more favorable to grant mortgage loans to young workers, whether they have a personal contribution or not.
To optimize your chances of being granted your credit by your financial institution, it is important that you demonstrate a stable financial situation, and not exceed 33% of debt in relation to your income.
Finally, it is important to take stock of your possible other outstanding loans, to determine if you have enough left to repay your home loan.
Find the best rate
Your bank can offer you a mortgage, but hiring the services of a broker can help you find the best rate. This professional is based on the rate scales applicable by the banks and determines with you your repayment capacity and the amount of your loan.
According to an OpinionWay survey, almost 30% of French people have used a broker.
Compare different loan insurance
Insurance of a mortgage is not compulsory, but the bank can require it, especially in the event of risks linked to death and disability. In all cases, you are not obliged to choose the insurance offered by the lending institution.
Take the time to compare the costs of the various types of insurance offered on the market. Be careful, however, that the insurance contract presents guarantees similar to that offered by the lending institution. More information on the website of the French administration.
Study the homeownership aids you can claim
Several government aids have been put in place to facilitate access to property for first-time buyers, including:
- – The zero rate loan which can finance up to 40% of the amount of your property purchase, without interest or bank charges.
- – The social accession loan, allocated under means conditions and able to finance the entire real estate operation.
- – The housing savings loan that can help you buy your main residence if you have had a housing savings account or plan for four years.
In addition to the aids mentioned above, it should be noted that there is also an approved loan, still little known and which is granted without means test, thus making it easier for you to buy or build your main residence.
And if you plan to buy in new real estate, know that you can claim other devices, under certain conditions of eligibility, as is the case of rental-accession or accession at controlled prices.
Take into account notary fees
Different notary fees depending on the condition of the property. They are around 7-8% in the old and 2-3% in the new.
According to the latest outlook from the Notaries of France, 1,020,000 transactions were carried out over twelve months at the end of July 2019, whereas last year the number was 953,000. According to this same study, this increase can be explained there also by the attractiveness of interest rates.