How to get a mortgage, under what conditions?
Do you want to finance a purchase and you are wondering how to get a loan from your bank? The steps to obtain a mortgage are not complicated, but suppose to show your best profile… and especially to provide the necessary documents so that your request is treated as soon as possible. Find all our advice to optimize your chances of achieving your project!
THE CONDITIONS FOR OBTAINING A MORTGAGE
For a bank, lending money assumes that it can assess your ability to repay the credit. To obtain a mortgage you must therefore send the establishment of your choice as much information as possible to reassure them of the quality of your request. If no condition is prohibitive, the more assets you will have and the more likely your request will attract your banker to obtain a mortgage .
The debt ratio
This is surely the criterion on which a bank remains the most demanding when it sees a request for a mortgage. The debt ratio represents the share of the repayment of your mortgage in the overall budget of your household . Until January 2021, it was recommended not to exceed a maximum rate of 33% (i.e. one third of household expenses devoted to repaying the loan), but, since that date, the High Council for Financial Stability (HCSF) recommends to increase this rate to 35%. The more your debt ratio will be below this threshold, the more you will optimize your chances of obtaining a mortgage.
Obviously, we more readily accede to the request of someone we trust. For a bank, this means that your mortgage application must be matched with the pledges of your solvency. It is therefore better to present healthy finances, with accounts payable history, without any notable banking incident.
If you don’t have an outstanding loan, that’s a plus. If you have already contracted one and it is fully reimbursed, or you are in the process of paying a reimbursement, this is not an obstacle to your request. On the contrary: you thus prove your ability to honor commitments vis-à-vis a creditor organization.
A stable situation
Very often, the question of the mortgage remains linked to that of the professional situation of the applicant . In the field, an employee on an open-ended contract (CDI) has more chances than another on a fixed-term contract (CDD) or on an interim basis. However, the application for a mortgage is not reserved for one category of the population. It is quite possible for a self-employed person or on a short-term contract to obtain a mortgage. The bank will then rely on other elements, supporting documents. For an entrepreneur, for example, it is advisable to provide the results of his establishment over the two or even three previous years.
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The question of the contribution
A mortgage request can be accompanied by a contribution from you. This personal contribution, the amount of which is not limited, is sometimes considered to be a determining factor in certain banks. However, it is not a sine qua non condition. A mortgage without contribution, also called loan at 110% (when the bank finances the amount of the transaction plus the 10% of ancillary costs: notary, file and guarantee), is possible. Only a part of the banks accept this request which generates more counterparts for the borrower: less attractive interest rate, higher borrower insurance, etc. The custom nevertheless wants that the applicant brings at least the ancillary costs to obtain his mortgage.
Did you know ?
Nexity supports you step by step in your project. Contact our Credit Solutions service , a dedicated real estate financing advisor will take charge of your file from the start of your process, and will guide you to help you understand how to obtain a real estate loan.
Good to know
Depending on your profile, banks sometimes require a few counterparts before accepting your mortgage application. They can, for example, request the migration of your accounts or the subscription to home insurance in their establishment. Accepting these conditions may facilitate negotiation.
HOW TO ESTABLISH YOUR MORTGAGE APPLICATION FILE?
Once you’ve assessed your ability to borrow, the first step is to put together the documents that make up your application package. Do not neglect this step, although it can be tedious:
photocopy of the family record book, marriage contract or PACS agreement if you are borrowing with your spouse.
last 3 months, financial results for the last 3 years (in the case of an entrepreneur).
bank identity statement (RIB), last 3 statements of all accounts (passbook, savings), proof of investments and personal contribution.
These documents must be provided by all co-borrowers if you are applying for a mortgage with another third party or a spouse. If you have already made an offer for real estate, you can also attach the preliminary sales contract or the sales agreement.
Good to know
You can submit your request yourself. You can also commission a real estate broker who will take care of canvassing the banking establishments for you. The advantage of the broker is that he will save you time and be able to obtain the mortgage that best suits your profile. However, it should be taken into account that its paid service generates additional costs.
WHAT STEPS TO GET YOUR MORTGAGE?
Once your mortgage application has been established and filed, your bank will use all these elements to develop a suitable offer.
- Receipt of the offer
This document contains all the characteristics of the proposed mortgage loan: interest rate, duration, specific conditions, additional costs. It is sent to you by registered letter, accompanied by an amortization table which specifies the amount of the monthly payments.
- The signing of the offer
You can only accept this offer and sign it after a statutory cooling-off period of 10 days. The offer remains valid for 30 days from the date of receipt. It guarantees the seller that you can get a mortgage and allows you to initiate the signing of the deed of sale.
- The release of funds
Once the offer is accepted and signed, the funds are released and paid directly to the notary responsible for carrying out the sale of the property.