No one can accurately predict whether interest rates will rise or fall. The only certainty is that in this year 2015, it is good to buy, have it built or simply renegotiate your mortgage. Fixed or variable rate? Over 20 or 30 years? With equity or with a deposit? We inform you about tips and tricks for obtaining a mortgage loan from your financial institution.
Principle of the mortgage
Obtaining a mortgage loan will depend on two sine qua non conditions. On the one hand, the portion between the value of the property and the amount to borrow which cannot exceed 80%. This difference will represent the contribution of equity. 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 may not exceed one third of your monthly income.
The ideal profile
Each lender has its own policy on granting credit. However, a couple who has job security, that is to say both of whom benefit from an open-ended contract and minimum 20% of equity, will have less difficulty obtaining his loan. The fact of benefiting from personal security is also a non-negligible element which will be taken into account, as will the non-existence of credits in progress.
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 housing. So be sure to do an in-depth analysis of the real estate market before committing to it and consult several financial organizations to take advantage of the competition. You have the opportunity to highlight your commercial flair and your negotiating skills. You can of course prefer to use the services of a broker.
If the fixed rate formula allows you to know in advance the amount of your monthly payment throughout your loan, the variable rate is likely to 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 mitigated.
Note, however, that a mixed formula which combines fixed and variable rates also remains possible. Do not neglect ancillary products, such as outstanding balance insurance, which may prove appropriate in the event of death, incapacity for work or invalidity.
Three solutions are open to you: renegotiating the reduction in the initial rate, temporarily suspending the repayment of the principal or extending the duration of the credit.
At the CPE, we offer you the best market conditions with preferential rates from 2.10%. Come and discover our mortgage solutions as a priority in order to finance the house of your dreams or to carry out your renovation work.