Real estate purchase: on the budget, do the math!

What is the amount of your personal contribution?

On paper, no law obliges you to finance part of your real estate purchase through a personal contribution. However, in practice, banks almost always condition the granting of a loan to your ability to mobilize part of your savings to pay certain costs related to the operation (notary fees, administration fees, etc.). In general, underlines Guillaume Dubosq, Cafpi’s commercial animation director,“Banks ask the borrower to provide at least 10 to 15% of the transaction amount. That is, between 20,000 and 30,000 euros for a purchase of 200,000 euros “. As a result, review all your accounts: passbook A, LDDS, PEA, corporate savings plan, etc.

Our tip: do not empty them entirely because, in addition to this personal contribution, many banking institutions require their borrowers to keep precautionary savings to cope with difficulties (the equivalent of an average salary of three to six months, on average).

The solution for employee savings

If this operation causes you to lose the seniority tax advantage of these products, it is not recommended to take out a life insurance contract or an equity savings plan (PEA) to make up your personal contribution. On the other hand, don’t hesitate to release your employees’ savings. The purchase of a main residence constitutes a reason for the early release of a corporate savings plan, provided that such purchase is not made through a real estate company (SCI).

Are you entitled to purchase assistance?

Depending on your resources and the desired housing (new or old, with or without work, etc.), soft loans and other subsidies allow you, if necessary, to complete your financing. Problem: These financial incentives are teeming and extremely scattered.“There is aid from the state, departments, regions, municipalities, Action Logement or even some banks”, lists Sandrine Allonier, director of studies at Vousfinancer. To help you find your way around, some organizations like Anil list them on their Anil.org site.

Our tip: once you have listed the help you can request, knock on all doors even after one or more refusals:“The award criteria are not the same from one aid to another. You could, for example, not be entitled to a zero-interest loan * but be entitled to a purchase bonus or a subsidized loan set up within a municipality.recalls Cécile Roquelaure, Director of Studies at Empruntis.

Two Action Logement aids: a loan and a bonus

With a modest income, do you want to buy your main residence when new? Action Logement offers you, under certain conditions, two grants:

  • The membership loan up to € 40,000.: Its interest rate is 0.5% (excluding insurance) and its duration is limited to 25 years. To benefit from it, it is necessary, among other things, to be an employee of a non-agricultural private sector company with 10 or more employees and to receive annual resources below a maximum ceiling (set for example between 37,594 and 57,357 euros for a couple) . , depending on the geographical area).
  • The membership bonus of 10,000 eurosTo receive it, it is necessary, among other things, to carry out a controlled price operation (mortgage-rent-membership or real solidarity lease), to be an employee of the private or agricultural sector, and to receive annual resources below a ceiling (set for example between 33,761 and 46,759 euros for a couple, depending on the geographical area).

More information on Actionlogement.fr

It all depends on your income, your expenses and … on you. With very few exceptions, banks are now forced to refuse loan applications for which the borrower’s debt-to-debt ratio exceeds a certain level. Specifically, the amount of your future monthly mortgage payment, including insurance, added to the recurring charges (reimbursement of other credits, subscriptions, alimony, taxes, etc.) must not represent more than 35% of the amounts you receive each month. (salaries, bonuses, rental income, etc.).

Our tip: a good strategy is not to exceed an effort rate of 30%.“A certain margin of maneuver must be maintained in the event of unexpected expenses for which additional credit will be required, such as the purchase of a new car if your own should no longer be usable”explains Cécile Roquelaure.

What is your borrowing capacity from the bank?

This varies based on the duration of the desired loan, its interest rate and your debt ratio which determines your maximum monthly payment. To get an idea of ​​how much a bank will lend you, use an online simulator.

Our tip: carefully withdraw the amount indicated by the simulator. The latter corresponds to the information that you yourself have provided to him. Especially in terms of interest rates. However, you will only know the final rate once your loan file has been prepared and your contract of sale has been signed.

Advice

Your [reste à vivre] it will be enough?

To possibly accept your loan application, your banker will review your expenses. Objective ? Determine if the amount that will be left to you each month once you pay off the monthly loan is not only enough to allow you to live properly, but also to maintain your current lifestyle. In other words, to pay for food, various bills, transport but also clothes and leisure activities.

Our tip: more or less accurately calculate your monthly financial needs to determine the monthly repayment ceiling that you can reach without feeling deprived.

What is your financial situation?

While the way you manage your money doesn’t in principle affect your borrowing capacity, it nevertheless plays a huge role in your chances of obtaining credit. Your banker’s opinion on your ability to repay your monthly installments largely depends on the status of your checking accounts. If you are regularly out of business, the risk is great that it will withdraw. The same is true if it finds that you have multiplied your lines of credit.

Our tip: to increase your chances, check your expenses in the months preceding your loan application and make sure there are no overly impulsive purchases. Also, if possible, pay off all your consumer loans. A healthy and uneventful financial situation will make it easier for you to negotiate certain terms of your loan (rate, prepayment penalty, etc.) with your bank.

Additional costs to be paid by the buyer

Buying a property does not just mean paying the amount requested by the seller. The buyer has to pay notary fees, which amount to approximately 8% of the selling price in the old building and 3% in the new one. Or the costs of collateral (mortgage, surety or money lender privilege) when you borrow to finance your operation. You may also be required to pay agency fees and bank administration fees.

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