Are you about to purchase real estate? Whether it is a purchase to establish the family’s main home or a real estate investment, you are making a good decision because real estate remains a sure value which is constantly evolving upwards and in any case which experienced only very rare temporary depreciations. In summary, by investing in “the brick”, you take very little risk and your capital grows year after year. The real estate market is full of players and parameters. What should you pay attention to when comparing different mortgage loan offers on the market? Here is the subject of our tip of the day.
Compare like with like!
Are you going to shop around at banks or credit brokers? This is quite normal. First of all, you need to compare like with like. Compare for a mortgage loan for the same amount of money and for the same duration.
Tip: lenders and credit intermediaries are required to provide you with a SECCI form before signing your mortgage loan contract containing the “standardized European consumer credit information”. This form contains all the information accurately and completely on the credit considered and will allow you to more easily compare the different offers.
Compare your credit intermediaries
Of course, you are looking for the best price on the market. But that’s not all. Also take into account the quality of the advice and the responsiveness of your bank or your credit intermediary. More and more solutions are available online and no longer guarantee you the service of an available broker and good advice. Many things can happen during the life of your mortgage and you will always need to have an advisor available. Don’t skimp on it!
What should you compare when it comes to a mortgage?
Financial conditions
First compare the interest rate and term of your mortgage. Tip: we provide you with credit simulators and fees for credit acts and notarial fees on our website.
Also compare the costs
You must also pay attention to application fees, notary fees and insurance costs. So, you need to compare the total cost of financing.
Tip: there is the possibility of obtaining a reduction in registration fees of 6% when acquiring modest real estate. More information on the modest housing reduction.
Other important elements
Don’t forget to pay attention to the flexibility of your credit, that is to say the possibilities of adjusting it or suspending the monthly loan payments.
Likewise, check the fees in the event of partial or total early repayment. You always have the right to repay your mortgage loan early, but the contract may have included significant fees. Be careful !
Example: Imagine you inherit a large sum of money. You may be tempted to repay your credit early. It would be an unpleasant surprise to find that to do this, you would have to pay compensation of a few percent.
Fixed rate or variable rate?
This question is unavoidable and the answer depends on the situation. At the time of writing this advice post, we recommend the fixed rate because fixed rates are still relatively low and they are about to gradually rise again.
Outstanding balance insurance?
Insurance represents a significant incidental cost. In principle, you are not obliged to take out outstanding balance insurance. You must discuss this with your bank or credit intermediary. In practice and unless they offer significant guarantees, few banks will agree to grant you a mortgage loan without insurance.
In your search for comparison, carefully check the guarantees that are offered in your insurance.
