You want to apply for a home loan , but you don’t know where to start. We explain how to do it and why entrust us with this project that is close to your heart.
What is a home loan?
Have you found the home of your dreams and want to become a homeowner? The mortgage, or mortgage, is a bank loan intended to finance totally or partially:
- The purchase of real estate (main residence, secondary residence or rental investment)
- Sa construction
- Or works on this one
A mortgage binds you contractually to a bank. The latter agrees to lend you money so that you can buy your property at a given time, against the full repayment of this sum with interest. This classic home loan formula can also be adapted to different variants that we will see later.
According to the latest figures published by INSEE, 58% of metropolitan households own their main residence. Among them, about a third are homeowners, that is to say that they have not yet finished repaying their mortgage to acquire their main residence. The mortgage remains a delicate and essential step, especially when it concerns the purchase of your first house or your first apartment .
How does a home loan work?
The pricing of a mortgage is based on 2 basic pillars that it is very important to take into account as a borrower:
- The borrowed capital
- The interest rate of the loan (it is also important to follow the evolution of real estate rates )
These two essential data can allow you to know the amount of monthly payments that you will have to repay.
In the background, there are also many ancillary costs that must be taken into account in the pricing of a mortgage:
- Borrower insurance and guarantees taken by the bank
- Application fee
- Notary fees
- Any prepayment penalties
- The mortgage guarantee in the event of a loan of this type
- The calibration of his depreciable loan
- etc.
Does the loan offer cover notary fees?
Generally, it is the personal contribution of a borrower that allows him to pay the various ancillary costs, and in particular the notary fees. If he does not have one, he can also request 110% financing by anticipating the cost of these notary fees. The loan offer will then cover this expense.
We advise you to carefully calculate your notary fees before you apply for a loan to purchase your main residence. Their amount can vary significantly depending on the location and type of your property (new or old, the old generally having a much higher percentage). Notary fees are a major component to make in your decision to buy new or old.
Why is having the best mortgage rate so important?
Mortgage has a cost, which is defined by your interest rate. You will therefore have understood that it is very important to take advantage of the best real estate rate in order to reduce this cost as much as possible.
And how is the interest rate of your mortgage calculated? The banking establishment is based on 3 elements:
- Financial market rates
- The costs of creating your mortgage, i.e. all the operating costs of establishing your loan
- The bank’s margin
But then, how to get the best real estate rate to lower the cost of your credit? Nothing is more important than presenting a solid application file to the bank.
The more you present a risky profile, the more you will see yourself applying a high mortgage rate. But there is a solution to lower it: the personal contribution . This will inevitably reassure your bank. Ditto if you add subsidized home loans such as the zero-rate home loan to your financing plan.
However, and even if it is essential, a low mortgage rate is no guarantee of obtaining the best mortgage. The other element that influences the price of your mortgage: its duration . Indeed lower monthly payments for a longer repayment period will certainly weigh less on your monthly budget but they will cost you more on arrival since you will pay interest longer.
What are the different types of mortgage?
Choose the right mortgage
Depending on your profile, your financial situation and your financing plan, there are several types of real estate loan:
- The real estate loan, the most classic and widespread version of the mortgage, which allows the purchase of a main or secondary residence.
- The In Fine loan for rental investments gives the possibility of repaying the capital at once, which allows the borrower to repay only the interest via his monthly payments. Interesting from a tax point of view, it concerns more heavily taxed households.
- The bridging loan , as its name suggests, adapts to the sale of a property in order to acquire a new one.
The depreciable loan, the standard mortgage in France?
As we have seen, the depreciable loan is the standard and classic version of the mortgage in France. Its denomination only serves, in short, to differentiate it from the loan in fine. Used by the majority of buyers , it makes you repay part of the capital and part of the interest in each monthly payment. Throughout the duration of the loan, you therefore increase your share of capital in favor of interest, until you become the full owner of your property.
Loans assisted in addition to the main mortgage
In addition to the main home loans that we have just mentioned, it is possible to combine different forms of subsidized loans. Granted by the State under conditions (of income or situation), these are granted to the borrower at an advantageous rate. Do not hesitate to ask !
Home ownership loans partly financed by the State:
- The Social Accession Loan (PAS)
- The agreed loan
- The zero rate loan (PTZ)
- The housing savings loan
- The housing equity loan
Finally, each mortgage can have different characteristics:
- The fixed rate loan
- The adjustable rate loan
- The secured loan
- The smoothed or tiered loan
- The flexible mortgage
Note that you can combine several different types of mortgages in order to optimize your financing plan as much as possible.
Simulate your mortgage online
To prepare your file as well as possible, do not hesitate to use the credit and mortgage simulation calculators available with lesferets. Several real estate loan simulations will allow you to get closer to the ideal parameters for your real estate project and according to your situation:
- The interest rate allowing inexpensive credit
- The monthly payment and a duration of the loan allowing you a sufficient remainder to live
- Home loan insurance with an excellent price & guarantee ratio
- Loan repayment conditions that allow you some flexibility depending on life events (marriage, divorce, accident, death, birth).
How to get a real estate loan?
To have a mortgage easily, you must first know the criteria on which the banks or the broker are based to evaluate your file as a borrower. If your level of income will be essential, there are many additional ones, which we return to you below.
The criteria of the good borrower according to the bank
- Your income
- The amount of your contribution
- Your debt capacity
- Your ability to save
- Managing your current account
- Your job
- The profile of the borrower / co-borrowers (single, couple, PACS, SCI, etc.)
Knowing this, you can easily identify the elements that will allow you to obtain a mortgage quickly:
- Have a good job
- Have a good personal contribution
- Manage your money well
- Carefully select the property you want to buy
Who to contact for your home loan?
The bank
Unlike consumer credit, which can be granted by banks and specialized organizations, mortgage credit is only granted by banks. To get a home loan, you can therefore turn to your bank and study its various offers.
The real estate broker
For a fee, the real estate broker undertakes to carry out this prospecting process with the banks. It is the guarantee of obtaining your mortgage, of benefiting from an advantageous rate and loan conditions perfectly adapted to your borrower profile without straining too much! At lesfurets, our real estate broker partners accompany you from the search for your property to the release of funds.
Who validates the mortgage?
It is the lending institution that validates the mortgage via a mortgage offer that you will receive by mail. Please note that this is not to be confused with a first agreement in principle. This is not valid to validate a mortgage but simply to confirm that negotiations between a loan candidate and the lending bank can continue.
What is a home loan offer?
Discover a mortgage offer
The loan offer is a document that summarizes the obligations of the lender and the borrower. Provided by the bank, it summarizes the terms of the mortgage that will be taken out (amount, rate, duration, repayment terms, reciprocal obligations and prohibitions and borrower insurance). It therefore constitutes for the borrower an essential support for an objective comparison of all the credit proposals on the market.
The deadlines for the loan offer: when to apply for your mortgage?
It is when you sign the sales agreement that the procedure for obtaining your bank loan begins. From this moment, you have 45 days to find the right loan. If you do not respect this period, a suspensive clause can cancel the sales agreement, and by extension, your real estate purchase.
This stage of the home loan offer is mandatory in the subscription of a loan. Once you have found your mortgage, the process is always the same: the bank sends it by post, you have a minimum reflection period of 10 days to accept it or not and you send it back by mail. If both parties agree to accept the conditions, this loan offer becomes a loan agreement.
How to choose your mortgage? How to get the best real estate loan offer?
Choosing the right home loan means taking out the most suitable offer for your real estate project and your financial situation, at the best rate. To do this :
- Take the time to properly assess your borrowing capacity
- Compare the different loan offers before committing
- Don’t just put real estate rates in competition
- Opt for the delegation of borrower insurance
- Try to include as many subsidized home loans as possible in your financing plan
How to pay less for your home loan?
As we have seen, a mortgage has a cost, which stems from many aspects: interest, borrower insurance, guarantee fees, brokerage fees, administration fees… To save on the cost of your mortgage loan:
- Compare and choose the right mortgage rate (fixed or variable).
- Choose the amount of your monthly mortgage loan payments carefully before you commit.
- Take into account the APR (Global Effective Annual Rate), formerly known as TEG (Global Effective Annual Rate), which adds up your interest rate and ancillary costs to find the most reliable indicator of the cost of financing your credit.
- Compare the borrower insurance for your real estate loan to obtain the best guarantees at the best price.
- Compare your home loan.
And if you have already taken out a loan to buy your home, rest assured, you can still save money by buying mortgages , which will allow you to benefit from a more advantageous borrowing rate. Also take the opportunity to check that you cannot enter into negotiations with your current bank. Indeed, renegotiating your home loan is a much less expensive operation than the repurchase, which will only cost you the costs related to the amendment to the contract with the new bank or the specialized organization concerned.
Why use a home loan comparator with lesferets?
After the comparison of insurance and consumer credit, lesfurets now helps you find with banks and other specialists, the most suitable real estate loan for your financial situation at the best real estate rate to finance your real estate project, thanks to his real estate loan comparator.
Indeed, to find the cheapest mortgage with the best repayment terms, you must compete with the offers of several banks (including those of certain online banks), which can quickly prove to be laborious if you do not use a good mortgage comparator.
All about real estate credit with lesfurets
To choose the right mortgage, you need to be well informed. To do this, lesfurets offers you:
- Guides and tips to know everything about mortgages
- Simulators to calculate and understand your monthly payments , your borrowing capacity or to simulate the calculation of your notary fees
* Fixed rates negotiated with one or more partners of La Centrale de Financement . They do not include the impact of miscellaneous costs such as notary, guarantee, insurance and intermediation costs.
Frequently asked questions about home loans
How to calculate interest on a mortgage?
To find out the amount of interest on your home loan, simply multiply your interest rate by the total amount of your outstanding principal . Generally significant at the start of repayment, their share is reduced as you reach maturity.How to renegotiate your real estate loan?
To renegotiate your home loan effectively, all you have to do is start the procedure with your banker. In order to achieve a minimum of savings, it will however be important to respect certain criteria concerning the share of interest already reimbursed.
- Have a substantial outstanding capital
- Carry out the operation in the first third of repayment of the credit
- Respect a fairly large rate differential
How to calculate the monthly payment of a mortgage?
To know the amount of your monthly payments, you will need to know the amount borrowed, the repayment period and the rate of your mortgage. With this information in mind, we suggest that you use a monthly payment calculator that will determine for you the amount you will have to repay each month. Which bank to get the best home loan?
There is no predefined answer to this question. Each application file being different, the solution to know the bank which offers the best mortgage remains to compare the offers. At lesfurets you will have the choice: we compare those of more than 120 banks . Do not hesitate .How to simulate a mortgage?
It’s easy, you just have to go to a site that offers to carry out the mortgage simulation operation online. At lesfurets, we offer you an intuitive tool that can be completed in just a few seconds. Your borrowing capacity, the amount of your monthly payments, the total cost of your credit, notary fees, your debt ratio, you will know everything about the budget for your project.
