How to properly put together your mortgage application?

Purchasing property can quickly become an uphill struggle if you are not well prepared and are not aware of the steps to follow, particularly in order to obtain a mortgage. In this matter, there are rules to respect, which will ensure that you ‘tick the boxes’ and thus put together a file that will be favourably received by banks. Well put together, it will progress more quickly and stand a much better chance of resulting in a credit proposal. Let us look at how to properly put together your application and thereby give yourself every possible advantage.

**Define your budget before signing a sales compromise **

To begin with, make sure you do not try to purchase property that you cannot afford. From the moment you approach a bank for financing, you must respect the rules for granting credit. In particular, the monthly payments must not exceed approximately 30% of your monthly income, and your employment must be considered stable: a permanent contract for the majority of cases, but it is now possible to have long-term temporary work or stable turnover over the last three years for business owners.

The calculation is simple: work out your borrowing capacity over preferably 20 years, add your deposit and you will obtain the acquisition amount, including notary fees, that you can reasonably consider. Beware of the deposit amount, which is regarded by banks as a sign of seriousness and must represent at least 10% of the acquisition amount.

If the calculation seems difficult, do not hesitate to make a request to your usual bank or to a broker, who will help you define your borrowing capacity. This step is essential before launching your property search, as it will ensure that you are well received by banks subsequently. Once the compromise is signed, you will have less than two months to present your signed loan offer: so be well prepared!

**Find out about the assistance you may be entitled to **

If your budget seems limited for your needs, you can increase your personal contribution or your borrowing possibilities thanks to certain forms of assistance.

Contact your local council or organisations such as Action Logement to determine whether you are entitled to assisted loans such as the Prêt à taux zéro (zero-interest loan), the Prêt Conventionné (convention loan) or the Prêt à l’accession sociale (social access loan). Perhaps your employer has also put in place schemes that may help you, such as an employer loan or employee savings scheme?

If your contribution seems too low, do not hesitate to ask for help from family or friends, even if it means repaying the loaned amount in addition to your credit monthly payments.

**Ensure a favourable personal situation **

The idea here is to present yourself to banks in the best possible light. Financially, make sure you have not been overdrawn in the 3 months preceding your request, or even 6 months for greater security. Where possible, present sound management of your current account, with constant income and lower expenditure each month.

Health is also an important issue, as your loan will need to be guaranteed by an approved organisation. You will generally be asked to declare any serious illness or accident resulting in hospitalisation in the last 5 years. An omission can be severely punished, so transparency is advised, all the more so because the consequence of a positive declaration is generally an increase in the cost of insurance rather than a refusal.

**List the documents to provide **

Now let us turn to the actual application, and the documents that you will need to enclose. Make sure you send all the items at once to the bank or broker if you have chosen to be assisted: each has better things to do than to write to you to request missing documents, and your file will be better perceived if it is clear and complete.

**Personal documents **

These can be prepared in advance of the application; we recommend that you put together the file at the start of your property search. Everything can then proceed very quickly and you will save valuable time. You will therefore first need to provide copies or originals of:

• your identity card or passport;
• your tax notices for the last 2 or 3 years;
• proof of address;
• your last 3 payslips;
• your employment contract;
• your last 3 balance sheets if you are a business owner;
• where applicable, your family record book, PACS certificate or marriage certificate;
• the amortisation schedules of any other loans currently being repaid;
• documents evidencing the contribution you are declaring (bank statements, employee savings statement, etc.);

**Documents related to the acquisition project **

Once you have found your dream property, the bank will need evidence of the project:

• the signed sales compromise (or sale promise);
• the reservation contract in the case of off-plan purchase (VEFA);
• a quote for the amount of work planned if it is a property to renovate;
• a document relating to the floor area if you are buying new, together with details relating to the land acquisition;
• the DPE (energy performance certificate) and other surveys, particularly useful if you are applying for a zero-interest loan;
• in the case of a bridging loan, the property title deed of the property you currently own.

To conclude, we cannot stress enough the importance of making approaches to several different banks. Each has its own granting criteria, and your file might be appreciated in one place and rejected out of hand in another institution. Likewise, the interest rates applied can vary significantly.

The procedures can be time-consuming and you may not have time to arrange multiple appointments. However, you still have the option of being assisted by a broker: as an experienced professional, they will immediately know which institution to approach to favour your file and will also be able to obtain the best terms for you. You do the preparation, they do the negotiating! In the meantime, we wish you a successful property search!