Preparing the financing of your first real estate purchase
Even if buyers are ready to take the plunge, there are still some uncertainties in the face of inflation, the increase in rates and the usury rate that ejects some candidates. The most affected are first-time buyers, who do not have a large enough deposit or who, because of young professional experience, do not have the prerequisites required to obtain a mortgage. That's why, before you start, take the time to read this guide to understand how to prepare your budget and your file for your real estate purchase.
Real estate loan: what is a personal contribution and how to build it?
- your personal savings ,
- a zero-interest loan,
- an inheritance or a donation.
There is no mandatory minimum or maximum deposit, however, the larger the deposit, the more banks will be willing to grant you financing. Lending institutions generally require a deposit of at least 10% of the total amount of your purchase. This 10% corresponds to additional costs, such as notary fees for example. Note that the larger the deposit, the more attractive the rate will be.
Real estate rates, usury rates: understand everything
- fixed, this means that it will not change for the entire duration of the loan.
- Variable (or revisable), this means that it will follow variations, upwards or downwards, during the term of the loan.
The rise in interest rates highlights the problem of usury, a system that is supposed to protect borrowers from abusive banking practices. The usury rate corresponds to the legal maximum interest rate that credit institutions are allowed to charge when granting you a loan. With a calculation method that is not well adapted to reality, some households have not been able to borrow this year.
What criteria impact the amount of a home loan?
Debt capacity refers to the amount of debt you can take on without jeopardizing your financial security. Expressed as a percentage, it varies according to your income and expenses and must not exceed 35%.
Taking on long-term debt is more expensive. Even if the monthly payments are lower, the interest rates are higher than for a shorter loan. Currently, it is not possible to borrow for a period longer than 25 years.
The professional situation is also a very important criterion for obtaining funding. The more stable your situation, the more you will reassure the banks about your ability to repay your mortgage. In this logic, the self-employed or people on fixed-term contracts will find it more difficult to obtain an agreement.
Debt capacity can only be increased by two factors: your fixed income and your fixed costs. For example, if your income increases and your expenses remain fixed, your capacity will increase.
Choosing a suitable property
- the evaluation of your purchasing capacity, as seen above.
- the definition of your needs, i.e. defining the contours of your project.
To do this, determine precisely the ideal property, your current and future needs. Do not hesitate to rely on the advice of a real estate professional, who will be able to advise you according to your desires.
First-time buyers: taking into account additional costs to make a successful property purchase
Tenez compte des autres coûts associés à l'achat d'un logement, tels que les frais de notaire, les frais d’assurance, etc. Lorsqu’on achète pour la première fois, il est possible de s'orienter vers un logement à rénover, pour limiter les coûts d’achat. Dans ces conditions, vous devez minutieusement tenir compte des dépenses d'entretien et de travaux.
Si vous envisagez d’acheter un logement en copropriété, vous devez également penser que certains coûts seront à dépenser dans l’année à venir : honoraires de syndic, charges de copropriétés, etc. De même, n’oubliez pas les impôts locaux comme la taxe foncière par exemple.
Aid and loans for your first property purchase
- the zero-interest loan. Intended for first-time buyers, the PTZ is an interest-free loan, granted in addition to another home loan. For example, it can be considered as a personal contribution. Its amount varies according to the nature and location of the dwelling, the number of people intended to live there.
- the Housing Action Accession Loan. If you are an employee of a private sector company that is part of the scheme, you can benefit from a loan at a preferential rate.
- the Social Accession Loan. The most modest households can benefit from a PAS, granted with an advantageous interest rate.
Note that some regions, or even some municipalities, may grant financial aid for first-time buyers who wish to buy or build their main residence. Do not hesitate to consult the website of the Departmental Housing Information Agency in your area.
Buying your first home is often stressful. It is not uncommon to have the impression of moving forward blindly or of launching oneself into the void without an emergency net. The solution is to prepare your project and your candidate file thoroughly, show that you know how to save money and manage your expenses. The support of a broker can be very useful, since he will be able to give you the benefit of his experience and his network of contacts to obtain the best financing offers.
