No one can accurately predict the rise or fall of interest rates. The only certainty is that in this year 2015, it is good to buy, to build, or simply to renegotiate your mortgage. Fixed or variable rate? Over 20 or 30 years? With equity or with a guarantee? We inform you about the tips and tricks to obtain a mortgage from your financial institution.
Principle of the mortgage loan
Obtaining a mortgage loan will depend on two essential 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 equity contribution. On the other hand, the ratio between expenses and the income of your household which must average 33%. Consequently, 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 who have job security, meaning both have indefinite contracts and at least 20% equity, will have less difficulty obtaining their loan. The existence of personal security is also a significant factor that will be taken into account, as well as the absence of current loans.
The best interest rate
If current rates are attractive, be aware that these low rates sometimes come with high prices for land and houses. Therefore, make sure to conduct a thorough analysis of the real estate market before committing and consult several financial institutions to leverage competition. You have the opportunity to showcase your commercial acumen and negotiation skills. You can, of course, prefer 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 for you. This is a matter of personal choice and financial literacy, knowing that if your repayment capacity is good, the risk of the variable formula is greatly reduced.
However, note that a mixed formula combining fixed and variable rates is also possible. Do not overlook ancillary products, such as a balance due insurance, which can be useful in case of death, incapacity to work, or disability.
Repayment difficulties
Three solutions are available to you: renegotiation for a reduction of the initial rate, temporary suspension of capital repayment, or extension of the credit duration.
What CPE Offers You
At CPE, we offer you the best market conditions with preferential rates starting from 2.10%. Come discover our mortgage credit solutions to finance the house of your dreams or to carry out your renovation work.
