Mortgage application: giving yourself every chance

Before you even begin your search for the property of your dreams, take the time to ask yourself the right questions and prepare your approach thoroughly. The purchase process, which takes several months, requires following specific steps. A comprehensive and secure view of your project will ensure you achieve the goal: obtaining your mortgage. Let us look at how you can give yourself every chance.

The steps to take before applying for a loan

Determining your actual borrowing capacity

Do not begin searching for a house or flat based solely on your taste preferences: you could face disappointment and waste valuable time. Before browsing the property listings, contact your bank even if you are not necessarily planning to take out the future mortgage with them. Your banker knows your financial situation, your income and your outgoings: they will be able to guide you on your actual and acceptable borrowing capacity for a bank.

With the same approach, you can also contact a broker directly, whose initial consultation is generally free of charge. With the documents you provide, they will be able to estimate the maximum amount you can allocate to the purchase, notary fees included.

You are now able to begin viewing properties that match your financial possibilities.

Signing the sales agreement

Once you have found the property, you will sign a purchase agreement with the seller. Directly between private parties or preferably with the assistance of a professional to ensure nothing important is overlooked (estate agent or notary).

We emphasise the importance of the agreement here, as it will be used to document your future lending bank about your project. All the costs are included: the purchase amount, estimated notary fees, agency fees if applicable. Furthermore, the agreement is essential as it determines the timeframe you are given to present the seller with your mortgage offer that has been accepted by the bank. While this timeframe can vary, it will generally be between 30 and 45 days.

Putting together a deposit

Even if you have a permanent contract (CDI), few banks today will agree to a mortgage without a deposit, which constitutes concrete proof that the buyer believes in their own project because they are financially involved.

The deposit amount matters from the moment it covers the notary and management fees: if possible, aim to save in advance 10% of the total project amount, which you can release and bring on the day of signing the title deed.

Submitting your mortgage application

Act without delay

The timeframe given by the agreement may seem comfortable, but do not be mistaken: contact one or more banks as soon as possible. The processing time for your application can turn out to be quite long. Additional documents may be requested depending on the assessment of your file, and decision-making times can be several weeks.

Failing the issuance of the loan offer within the timeframe, you can ask the bank for a letter stating an agreement in principle to reassure the selling property owner.

Prepare a thorough file in advance

Before submitting your application, find out what documents are required for a mortgage application. Submitting a complete file to a bank from the outset will save you time and will be appreciated as a sign of seriousness.

Also, since your purchase project has been in the making for some time, ensure you present an impeccable banking history over the last three months. The absence of overdraft and sound management of your money will be reassuring assessment criteria for the lender. They will not only be encouraged to respond favourably to your request, but they may be able to offer you a more attractive rate to ensure a good borrower like you signs the mortgage with their establishment.

Using a broker to maximise your chances

Approaching several banks

Obtaining a mortgage is never guaranteed, even with a solid file. Beyond this, you do not know whether your bank, or another one you contact, will make you the best offer you are entitled to. This is where the broker comes in, to save you time and therefore money.

From the outset, the broker will gather all necessary documents and ensure your chances of obtaining a credit are maximised. They will then contact several banks themselves and, through a usual process, save you from numerous appointments at bank branches and the repetitive explanation of your property project.

Finally, each bank’s response will go to the broker: a single contact will be enough for you to learn the decisions and choose between the different loan offers.

Obtaining better terms

The competition between different banks can therefore affect the credit rate (APR) offered to you. But above all, the broker has bargaining power through the volume of files they present to banks. They are a much better client than you in this regard, and the bank will be more inclined to grant them attractive rates.

Certain advantages are also negotiable, in addition to the credit term and rate:

• the possibility of adjusting the monthly payments after one year;
• the arrangement fees;
• the early repayment penalties;
• the borrower insurance;
• the possibility of deferring payments in case of financial difficulty.

This list is not exhaustive and demonstrates the benefit of trusting the broker, who, positioned as a trusted intermediary, will be able to act in your best interest.

Obtaining a mortgage is comparable to an endurance race: it is necessary to stay focused over a sometimes long period, well supported and well prepared. Then carefully read all the conditions being offered and make the right choice. Nothing is insurmountable, especially when it leads to moving into your ideal home!

You should also read: “Property purchase: is a deposit essential?”