You cannot acquire your property on the basis of your own funds. Therefore, you plan to borrow the capital from a bank.
Before filing your file, take note of its credit acceptance process and the criteria that this bank will study in detail in order to put the odds in your favor.
How does your repayment capacity influence the acceptance of credit?
The first element that a bank will consider is your repayment capacity. This repayment capacity is based on three main criteria:
- Your personal contribution. Essential to the acceptance of credit, this element will allow you, depending on its amount, to negotiate the rate and the fees.
- The level of your resources. This level is calculated on the basis of your last 3 payslips and your latest tax advice notices, it allows the banker to calculate and consider the (fundamental) rule of 30% of your borrowing charge.
- Your disposable income. By subtracting your monthly income, your taxes and the monthly payment envisaged for the loan, the banker determines the “remainder to live”. Note that the composition of your home influences this point.
PLEASE NOTE: holding a housing savings account or plan that does not influence the establishment in its decision-making.
How does the banker calculate your debt ratio?
Collecting these elements allows your financial advisor to make the ratio of expenses to resources, to determine the debt ratio. Among the charges taken into account include in particular all outstanding credits. Among the resources, your housing assistance also comes into the calculation of the famous rate.
At this time, the bank also takes a few minutes to study the movements of your bank account. So, your banker will not fail to check if your account has experienced overdrafts!
Likewise, the establishment will check if you are not registered on the national payment incident file!
What collateral can your bank require?
In the process of accepting credit, your banker may, in negotiations, require to:
- Apply for borrower insurance.
- Condition its agreement to the mortgage of the property to be financed.
- Impose a lien guarantee authorizing, for reimbursement, the seizure of your property by legal means.
- Hire a third party to become your surety – preferably financial organizations specializing in suretyship to an individual, such as Good Credit.
If this process is adopted by all the lending institutions, some may add their own wishes.
Fortunately, a broker specializing in real estate credit is required to know the specifics of each of its partners – particularly in terms of its acceptance criteria.
In order to present a file that meets the expectations of the bank, do not hesitate to rely on the expertise of a broker, whose multiple assets will weigh heavily in your favor.