Real estate credit: 3 rules to follow to see your loan accepted in 2022


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From 1 January 2022, the conditions for granting loans have drastically tightened. Indeed, the High Council for Financial Stability (HCSF), the supervisory body in charge of overseeing the French financial system as a whole, which aims to preserve the stability of the financial system so that it can support economic growth, has addressed the subject of the conditions for granting real estate loans. This body, which sets the framework for bank loans and the criteria for accepting loans, has therefore tightened the screws: under what conditions can we borrow today? What are the rules to follow to get the mortgage application accepted? Find out in this article our 3 tips to put the odds on your side.

An effort rate of 35% maximum

First, we are used to saying that the monthly loan installments must correspond to one third of the income of the borrower (s), as was the case before January 1, 2022. But now the maximum debt ratio must not exceed 35% of monthly net income before tax, or just over a third of income.

Note, however, that this amount now also includes the borrower’s insurance, which is in effect more restrictive for borrowers who could once have borrowed up to 33% not counting the borrower’s insurance.

A credit period of less than or equal to 25 years

Another novelty in 2022: the duration of the loan has been reduced. In fact, the maximum credit duration imposed by the HCSF is now 25 years. However, there are some exceptions for real estate mortgages for sale in the future state of completion, or Vefa, and for contracts for the construction of individual homes. For all these special cases, the maximum loan term is now 27 years.

Note that this increase to the maximum 35% of the effort rate and the reduction of the duration of the loan to 25 years is an obligation for banks that must imperatively apply these criteria to 80% of their practice. 20% of credit offers issued per quarter may derogate from this rule, but beware, 80% of this allowed slack must be for prime residence buyers and 30% of these must be first-time buyers . The banks’ room for maneuver is therefore very limited.

Read also: Becoming the owner of your property: how much it really costs you

A contribution to cover at least notary and agency fees

Have these new provisions caused an upheaval in the granting of mortgages? Not really because banks have already often applied these eligibility criteria and these measures have been announced and planned.

Remember, however, that banks are increasingly attentive to the contribution that must cover both agency and notary fees, and ideally also part of the sale price. In fact, the higher the contribution, the shorter the loan term and the lower the borrowed amount, which makes it easier to be below the fateful 35% bar.

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