No one can predict with accuracy the rise or fall of interest rates. The only certainty is that in this year 2015, it is a good time to buy, build, or simply renegotiate your mortgage loan. Fixed or variable rate? Over 20 or 30 years? With own funds or with a guarantee? We inform you about the tips and tricks to obtain a mortgage loan from your financial institution.
Principle of the mortgage loan
Obtaining a mortgage loan will depend on two sine qua non conditions. On one hand, the ratio between the value of the property and the amount to be borrowed, which cannot exceed 80%. This difference will represent the contribution of own funds. On the other hand, the ratio between expenses and your household income, which must be on average 33%. Therefore, the amount of your monthly payment cannot exceed one-third of your monthly income.
The ideal profile
Each lender has its own policy regarding the granting of loans. However, a couple with job security, meaning both have a permanent contract and at least 20% of own funds, will have less difficulty obtaining their loan. Having personal security is also a significant factor that will be taken into account, as well as the absence of ongoing loans.
The best interest rate
If current rates are attractive, be aware that these low rates sometimes go hand in hand with high prices for land and homes. Therefore, make sure to conduct a thorough analysis of the real estate market before committing and consult several financial institutions to leverage competition. This is an opportunity to showcase your commercial flair and negotiation skills. You can of course choose to use the services of a broker (www.cpe-credit.com).
If the fixed rate formula allows you to know in advance the amount of your monthly payment throughout your loan, the variable rate may hold surprises. This is a matter of personal choice and financial culture, knowing that if your repayment capacity is good, the risk of the variable formula is greatly mitigated.
Note, however, that a mixed formula combining fixed and variable rates is also possible. Do not overlook ancillary products, such as outstanding balance insurance, which can prove useful in case of death, incapacity for work, or disability.
Repayment difficulties
Three solutions are available to you: renegotiation of the initial rate reduction, temporary suspension of capital repayment, or extension of the loan duration.
What CPE offers you
At Crédit Populaire Eurpéen, we offer you the best market conditions with preferential rates starting at 2.10%. Come and discover our mortgage loan solutions first to finance the house of your dreams or to carry out your renovation work.