
Are you about to acquire a real estate property? Whether it’s a purchase to establish the family’s main residence or a real estate investment, you are making a good decision because real estate remains a safe value that constantly appreciates and, in any case, has only experienced very rare temporary depreciations. In summary, by investing in “brick and mortar,” you take very little risk, and your capital grows year after year. The real estate market is teeming with players and parameters. What should you pay attention to when comparing different mortgage loan offers on the market? This is the subject of our advice for the day.
Compare what is comparable!
Are you going to visit banks or credit brokers? That’s perfectly normal. First and foremost, you must compare what is comparable. Compare for a mortgage loan that involves the same amount of money and the same duration.
Tip: Lenders and credit intermediaries are required to provide you with a SECCI form containing the “standard European consumer credit information” before signing your mortgage loan contract. This form provides all the information accurately and completely about the proposed credit and will make it easier for you to compare different offers.
Compare your credit intermediaries
Of course, you are looking for the best price on the market. But that’s not all. Also consider the quality of advice and the responsiveness of your bank or credit intermediary. More and more solutions are available online and no longer guarantee you the service of an available broker and good advice. Many events can occur during the life of your mortgage loan, and you will always need to have an available advisor. Don’t skimp on this!
What should you compare in terms of a mortgage loan?
Financial conditions
First, compare the interest rate and the duration of your mortgage loan. Tip: We provide credit simulators and credit deed and notary fee simulators on our website.
Also compare the fees
You should also pay attention to the file fees, notary fees, and insurance fees. Thus, you need to compare the total cost of financing.
Tip: There is the possibility of obtaining a reduction in registration fees to 6% when acquiring a modest property. More information on the modest housing reduction.
Other important elements
Don’t forget to pay attention to the flexibility of your credit, that is, the possibilities of adjusting or suspending the loan installments.
Also, check the fees in case of partial or total early repayment. You always have the right to repay your mortgage loan early, but the contract may have provided for significant fees. Be vigilant!
Example: Imagine you inherit a significant sum of money. You might be tempted to repay your credit early. It would be a bad surprise to find out that to do so, you would have to pay a penalty of a few percent.
Fixed rate or variable rate?
This question is unavoidable, and the answer depends on the economic situation. At the time of writing this advice post, we recommend the fixed rate because fixed rates are still relatively low and are about to gradually increase.
Outstanding balance insurance?
Insurance represents a non-negligible ancillary cost. In principle, you are not obliged to take out outstanding balance insurance. You should discuss this with your bank or credit intermediary. In practice, and unless you offer significant guarantees, few banks will agree to grant you a mortgage loan without insurance.
In your comparison search, carefully check the guarantees offered in your insurance.