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How to Properly Mount Your Mortgage Application ?

Posted by Michel on September 15, 2021

If you are not properly prepared and aware of the procedures to take, particularly in order to get a mortgage, purchasing real estate may rapidly become a way of the cross. Rules must be followed in this section to guarantee that you “fit in the boxes” and therefore create a file that financial institutions would accept positively. It will go quicker and have a far greater chance of becoming the topic of a credit offer if it is well-constructed. Let’s look at how to correctly mount your request and so increase your chances of success.

Define your budget before signing a sales agreement

To begin, avoid attempting to purchase real estate that you cannot afford. You must follow the regulations for providing loans from the time you contact a bank for funding. Monthly payments should not exceed approximately 30% of your monthly income, and your employment should be considered stable: in most instances, an indefinite contract, although it is now allowed to claim temporary work. Over the past three years, entrepreneurs have had a long-term or steady turnover.

The research is simple: compute your borrowing capacity over a 20-year period, add your contribution, and you’ll receive the purchase amount you may realistically anticipate, including notary costs. Pay attention to the size of the contribution, which is seen by banks as a proof of seriousness and must be at least 10% of the total purchase price.

If the arithmetic is too complex for you, contact your regular banker or a broker, who will assist you in determining your debt capacity. Before you start searching for a home, you must do this step to guarantee that you will be warmly welcomed by the banks. You’ll have fewer than two months from the time the compromise is signed to submit your signed loan offer, so be ready!

Find out about the assistance you are eligible for

If your budget seems to be constrained in proportion to your requirements, various assistance may help you enhance your personal contribution or borrowing capacity.

Determine if you are eligible for subsidized loans such as the zero rate loan, subsidized loan, or social access loan by contacting local town hall or groups such as Action Logement. Perhaps your company has taken steps to assist you, such as an employer loan or an employee savings plan?

If your contribution seems to be insufficient, do not be afraid to enlist the assistance of your loved ones, even if it means repaying them the amount borrowed in addition to the monthly loan installments.

Ensure a favorable personal situation

The goal is to portray oneself in the best possible light to banks. Make sure you haven’t overdrawn your account in the three months leading up to your request, or even six months for further protection. Demonstrate good checking account management wherever feasible, with steady income and reduced monthly expenditures.

Because your loan will have to be guaranteed by an authorized organization, your health is also an essential consideration. In general, you will be requested to report any severe sickness or injury that resulted in hospitalization in the previous five years. Because omission may result in serious consequences, openness is recommended, as a positive declaration typically results in a rise in the cost of insurance rather than a denial.

List the documents to be provided

Let’s go to the specific request and the papers you’ll need to submit with it. If you have decided to be accompanied, be sure to submit all of the components to the bank or broker at the same time: everyone has better things to do than write to you to claim missing papers, and your file will be better perceived if it is clear and complete.

Personal documents

These may be produced in advance of the request; nevertheless, we recommend that you start putting together the dossier as soon as you start looking for a home. Everything may then go forward at a rapid pace, saving you valuable time. As a result, you must first submit copies or originals of:

• your driver’s license or passport;

• your tax notifications from the last two or three years;

• your proof of address;

• your latest three paystubs;

• your contract of employment;

• if you’re an entrepreneur, your last three balance sheets;

• if appropriate, your family record book, PACS, or marriage certificate;

• documentation supporting the contribution you’re announcing (account statements, employee savings statements, etc.);

• amortization tables for any other loans under repayment;

Documents related to the acquisition project

The bank will need the following papers after you have discovered the property of your dreams:

• the signed sales agreement (or the sales agreement);

• the reservation contract in the case of an off-plan purchase;

• an estimate of the amount of planned work if it is a property to renovate;

• a document relating to the area if you are buying new, as well as details related to the acquisition of the land;

• the DPE and other diagnostics, which are especially useful if you are applying for a zero interest loan.

Finally, we cannot stress enough the importance of increasing the number of stages and using various banks. Each has its own set of award standards, so your case may be evaluated in one location but rejected outright in another. Similarly, the interest rates that are imposed may differ considerably.

The procedure may take a long time, and you may not have enough time to keep all of your appointments. You do, however, have the option of having a broker accompany you: as a seasoned expert, he will know right away where to send your file for promotion and will be able to negotiate the best terms for you. You are in charge of the preparation, and he is in charge of the negotiation! Meanwhile, we wish you luck in your home hunt!

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