At a time when we still know historically low borrowing rates, Café de la Bourse gives you the keys to choose your mortgage and renegotiate it successfully. Also check out our online mortgage comparison of the moment and our video on all the tips to get your file accepted by getting the best rates.
Real estate loan simulation
Many banks and online brokers offer on their websites tools for mortgage simulation. If these simulations are not worth credit proposal (be careful not to confuse them with online mortgage offers online banks), however, they have some usefulness. Indeed, whatever your profile (first-time buyer or not) and the type of property you want to acquire (principal residence, secondary, rental investment), a simulation allows you to estimate the amount you can borrow and thereby same, the total amount of purchase you can claim. You will also be able to know the costs related to interest on borrowing and borrower insurance or the exact amount of “notary fees”.
Beware however, many factors are taken into account when taking out a mortgage (including the professional situation that is not limited to income, family situation, savings capacity, etc.) and simulators take them not all account. To have a clear idea of the amount you can borrow and the amount of your monthly payments including interest and insurance, it is better to get closer to a broker or ask oneself proposals to at least three banks.
Real estate loan comparison
It is generally difficult to draw up comparative tables for real estate loans because the rate grids for real estate financing vary according to many parameters, among which the evolution of exchange rates over time within the same bank, the difference in rates according to the regions, your personal situation (single, couple, married, pacsé, contribution, tenant, owner, etc.) and your professional situation (employee or liberal profession, on permanent or fixed-term contract, official or not, income, bonuses, etc.).
Nevertheless, online banks often display standardized rates for a typical borrower profile, other credit institutions offer self-made simulations or carry out personalized studies for you within 48 hours. Here is our comparative mortgage online.
It is also recommended that you be accompanied by a professional who will help you determine which banks offer the most advantageous loans. More than two-thirds of French people (first-time buyers as experienced borrowers) are reassured when accompanied by a specialist mortgage broker, according to an opinion poll Opinion Way for Pretto, conducted in November 2017 on a sample of 1,068 people, representative of the French population.
The broker specialized in real estate knows this market perfectly and will be able to accompany you in the choice of your loan and during the negotiation with your bank. It is often valuable to entrust your wishes to a multi-brand contact (the broker), who will compare the offers, to a single-brand contact (the advisor of your bank), which aims to make you take the loan proposed by his bank.
Benefit from the best real estate rate for your credit: our 3 tips
Prepare your mortgage loan with care
To have a solid financing record, you need a personal contribution of at least 15% to 20% of the price of the property you want to acquire (according to CBRE). Financing more than 20% of the amount of the acquisition with own funds is a factor much appreciated by the bankers (according to Credixia).
Think of :
- Sold out consumer credits
- Avoid overdrafts
- Highlight your strengths: young age, professional potential, your seniority with your employer, existence of additional income or ability to save regularly.
- Optionally, guarantee to the bank that will grant you the mortgage to domiciliate his wages
Attention, since January 1, 2018, domiciliation of income within the bank may be mandatory in case of preferential advantage (lower rate or no file fees for example). This provision must however be clearly stipulated, in writing, on the contract. If a customer decides to change bank in the course of credit, this preferential benefit will be removed and therefore the monthly payments will be recalculated with the rate without benefit.
Note: the maximum duration of this obligation is limited to 10 years
Play the competition for your home loan
- File your file with at least 3 banks.
- During the negotiation, present the offers of the competitors that you requested
Borrower insurance: negotiate the insurance delegation
Since September 2010, banks can no longer impose their own insurance on borrowers who have the option of being insured with the insurance company of their choice. Indeed, it is not only necessary to focus on the negotiation of the borrowing rate because insurance at a high rate can make losing the benefit of an attractive real estate loan. According to Credixia, a delegation of insurance can generate up to 60% savings on the total cost of loan insurance.
In addition, the so-called “Hamon law”, adopted in 2014, makes it easier to compete with the purchase of a borrower insurance to obtain a more competitive contract that is better adapted to the personal situation of the client. ‘borrower. Banks have an obligation to provide their clients with detailed information about the loan guarantee levels they require. In addition, with this Hamon law, the consumer could terminate his contracts on the first anniversary of the contract. Since February 2017, the Sapin 2 law extends this possibility. From now on, the consumer can cancel each year his insurance of mortgage loan if he wishes it, on a condition however: the substitution by a contract with the equivalent guarantees. This measure concerns all mortgages subscribed from the date of publication of the law. And, from January 1, 2018, all real estate loans should be concerned (more than 8 million contracts anyway), but that was without counting the legal challenge of insurers and banking groups via the French Banking Federation. The Constitutional Council, at its request, had to again approve these contracts signed before 1 March 2017. The decision came Friday, January 12, 2018: it confirms the annual termination right for all insurance contracts borrower.
Thus, thanks to the amendment Bourquin, passed the first year of insurance, the borrower can change insurance on the anniversary date of his contract by respecting a notice of 2 months. Note: The Advisory Committee of the Financial Sector ruled in November 2018 on the anniversary date to be used for all contracts: this is the date of signature of the loan offer.
These measures should make the insurance market more fluid and ensure that consumers can compete more effectively and benefit from the best-performing offers.
The balance sheet of the Hamon law concerning the bancassurance sector is encouraging and proves that this measure is a real benefit to purchasing power. In fact, in 3 years, 101,860 borrower insurance contracts were changed, allowing French households that benefited from them to save 1.093 billion.
Nevertheless, 85% of borrower insurance contracts remain in the hands of lending institutions, according to the press release of January 12, 2018 by Agéa, the National Federation of General Insurance Agents Unions. The situation is described as oligopolistic and anti-competitive by Astrid Cousin, spokesman for Magnolia.fr who adds: “According to a survey conducted by Magnolia.fr in November 2017 with 10,000 owners, 67% of respondents had not aware of their right to annual termination and 52% wanted to take advantage of this in order to save money. If each of them jumped the pace, thanks to the amendment Bourquin, it would be an average of 3,000 € / year that would be redistributed to each French owner. “
Unemployment insurance: carefully examine the job loss guarantee
The loss of employment guarantee often offered with loan insurance, which is of course reserved for employees, is optional, unlike the risk of death / total and irreversible loss of autonomy. The loss of employment guarantee is to be carefully considered because it presents very variable conditions according to the contracts. For example, be attentive to the waiting period, the amount of compensation, the duration of compensation, etc.
Real Estate Loan Renegotiation: Our Tips for Renegotiating Real Estate Loans
Despite the slight increase in recent months, there is still time to renegotiate your mortgage if you have not done so to reduce your overall cost of borrowing and your monthly payments. Note that this operation is all the more advantageous as the remaining duration of the credit is long. Renegotiating a loan is therefore generally only of interest during the first third of the life of the loan, when interest is still high.
Several options are at your fingertips:
Real estate loan renegotiation: make an appointment with your bank
You can first contact the bank from which you have purchased a mortgage. After studying the competition, make an appointment with your advisor to submit your request, evidence to support. Some banks – and some advisors! – are more open to negotiation than others, but the process is worth it. Although banks are more generous in terms of rates and fee reductions with new customers, an internal renegotiation is less expensive than a credit buy-out by a competing bank. Count a few hundred euros of fees – negotiable.
Credit redemption: go through a real estate broker to buy back your loan
If your bank is unwilling to renegotiate your loan, you must go in search of an institution with better borrowing conditions. You can do this research on your own or seek the help of a broker who will identify the best offers. The broker is supposed to get better loan terms by the weight of his multiple files, but doing the solo operation is not insurmountable.
If you choose to delegate, you may have to pay the broker for the service rendered. Online brokers generally do not charge brokerage fees and are remunerated directly by banks, based on existing trade agreements. Normally you will not have to pay any fees.
Live brokers conduct a more “personal” trading – related to your situation – and directly charge customers about 1% of the borrowed capital or a fixed price (less than € 1,000).
To establish your loan redemption file, the credit agency will ask you to meet the same criteria as when you subscribed to your mortgage and will therefore check your debt capacity, your professional stability, your bookkeeping, the rest to live, etc. In addition, you will be asked for one or two real estate estimates to verify that the current value of the property is greater than the amount of the loan to be redeemed.
More importantly, you will have to “compensate” the home bank, which will weigh on the overall cost of the renegotiated credit. The prepayment penalties can indeed be up to 3% of the outstanding capital, except amendment to the contract negotiated at the time of the subscription of the loan.