To get the best rate, comparison is a key step.
Because you are embarking on a real estate project, a first purchase, a rental investment, the purchase of a second home or a real estate loan buyback, the financing conditions, and in particular the real estate rate, occupy your thoughts. Loans, a financing broker, will accompany you in this stage of life and will negotiate the best conditions for your mortgage for you.
The period is indeed very favorable for financing the purchase of real estate with a mortgage. Why not take advantage of the low rates and longer terms? Moreover, in addition to protecting borrowers from over-indebtedness, the State and communities greatly promote home ownership, particularly through the many assisted loans, to which you may be entitled!
To put the odds in your favor, be well prepared. Loan Financial has rolled up its sleeves to analyze how a mortgage works in the following lines and help you achieve your project!
1. Understand everything about mortgage loan
How does a mortgage work?
Understanding how a loan works means mastering the concept of "interest". They represent both the main cost in financing a real estate acquisition and the heart of the mechanics of banks. In addition, the operation of a mortgage is not very intuitive! So we are giving you some clarification.
Most borrowers have a so-called amortizable loan (more on this below). How does it work ? Already, remember that you will have to pay interest and part of the principal on each monthly payment, but the share of both changes during the loan. Moreover :
The monthly payments are constant;
The interest is proportional to the outstanding capital. Calculate your interest.
They are therefore important at the start of the loan and decrease over time. The repaid capital (or amortized capital) is the difference between the monthly payment and the interest paid. Unlike interest, the repaid capital increases from month to month.
In addition, the mortgage is in the majority of cases associated with a personal contribution. This is the amount of money you will have to pay out of pocket when you buy it. Generally banks ask to contribute at least 10% of the price of the property, which corresponds to the notary and guarantee fees. In fact, the more money you have, the more reassured your banker will be - but that's no reason to put your money aside, keep a safety mattress!
Guarantee and insure your mortgage.
Home loan insurance
You can not cut it, taking out borrower insurance is mandatory to obtain a mortgage. And so much the better, since it guarantees the reimbursement of monthly payments in the event of a hard blow. It’s even a great way to protect yourself and your family.
There are several possible levels of coverage, from minimum subsistence to more comprehensive coverage. The minimum level of coverage varies depending on the project. Death insurance is compulsory. It ensures the repayment of the loan in the event of the death of one of the co-borrowers. It is always coupled with one or more disability insurance. There are several types of contracts covering different degrees of disability (partial or total) and inability to work (temporary or irreversible). The cost of insurance varies widely depending on the contract, Loan Financial can help you minimize it.
To guard against the risk of default, banks require that the loan also be covered by a guarantee. It allows the reimbursement of the credit in the event of payment default outside of cases covered by insurance. This collateral costs you around 1% of the loan amount. There are two types of guarantees: surety organizations and mortgage (or real guarantee). The choice of guarantee depends partly on the bank: some banks will almost always favor the guarantee, others the real guarantee. A bond is generally less expensive than a real security.
Choosing the right mortgage
There are different types of loan: most real estate loans granted in France are said to be “amortisable”.
The depreciable loan is the most common, it is the one that we offer in most cases after the simulation of your mortgage. Its duration varies between 5 and 30 years, but in Germany borrowers choose an average of 18 years, according to Crédit Logement.
Contact us to get your credit:
Address: Charlottenstraße 33 / 33a, 10117 Berlin / 32 Rue de Saint-Pétersbourg, 75008 Paris, France.
WhatsApp Telefon: +49 17 627 985 007 - France: +33 7 56 87 29 46
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